City finances

‘Budget 101’ night draws inquiring minds

Finance Committee PDF with interim city manager’s deficit-reduction strategy

What would the 10-year deficit be if the city hired additional staff?

Can we privatize the fire department to save money?

Is the city considering a tax increase?

Those were just a few of the questions Chicoans threw at city councilmembers and staff Monday night (Oct. 22), in a special session of the Finance Committee that was televised and cybercast.

The city doesn’t gain much money from annexation, so why do it?

What would it take to change the tax-sharing agreement with the county?

Is the RDA pass-through negotiable? (In other words, can the city reduce the county’s take of Chico redevelopment funding?)

How have other cities handled their problems?

In person, by phone and via e-mail, questions—and notions—flowed freely. Speakers had no time limit, and no idea was off-limits. Police Capt. Mike Maloney may not have liked hearing Richard Ek suggest that citizens bear arms, thereby taking responsibility for their personal safety, but he didn’t interrupt the retired professor’s lengthy train of thoughts.

In the end, some questions got answered and some got referred to Finance Director Jennifer Hennessy for further information.

Deficit with new hires? Double the $56 million projected at current staffing and expense levels.

Private fire department? Not enough info.

Tax increase? Only if public reaction is favorable, Councilman Scott Gruendl said. The council can cut spending but can’t approve tax hikes—it can only put them on the ballot.

Why annex? That’s a bit more complicated, but basically, interim City Manager Dave Burkland said, annexing “islands” of unincorporated land makes sense governmentally even if it’s not a bargain financially.

Sales-tax share adjustable? What it’d take, Gruendl said, “is a lot of negotiation and time.” The take of the third committee member, Larry Wahl: “It is permanent until the two parties agree to change it.”

What about RDA share? “Good question!” replied Sherry Morgado, housing and neighborhood services director, in response to speaker Bob Best. Effused Gruendl: “Another brilliant idea by Bob!”

Other cities’ solutions? Case study forthcoming.

The Finance Committee typically meets one morning a month, as it did the following day (Oct. 23). Long-range financial planning is no routine matter, so the committee sought to increase public participation by scheduling three evening sessions. “Budget 101” was the first. The Nov. 5 session will cover economic development; Nov. 18, future city needs.

“The normal meetings are more insulated,” Councilwoman Mary Flynn said as the crowd of around 30 exited City Council chambers Monday night. “I certainly got some new things to think about. I didn’t come into the meeting the way I’m thinking about things on my way out.”

Among the fresh thoughts related to assets: Lon Glazner asked about the city’s cash on hand and the liquidity of various holdings. For instance, is there property to sell? “I hadn’t thought about assets in that way,” Flynn said, “how to use them to our best advantage.”

Flynn continued: “It’s a provocative discussion. A lot of times, people who aren’t as immersed in the process as councilmembers and staff are bring a really good perspective.”

Tuesday morning’s meeting drew some more of them for a different, highly anticipated presentation: Burkland’s recommendations for reducing the deficit.

Former City Manager Greg Jones gave the council a matrix of five dozen measures to increase revenue and/or trim expenses. He did not prioritize them, however, and many did not specify the financial impact. Burkland sought to address this by presenting a strategy developed in conjunction with his department heads.

The “first phase” comprises 14 cuts that together would save the city $2.2 million per year. They include scaling back on firefighters’ overtime, freezing managers’ merit raises for a year, decreasing the fleet replacement reserve and reducing contributions to county libraries and employee medical benefits.

The second phase will focus on revenue enhancements, the third on ways to meet future staffing and service needs.