Good news, bad news
Chico’s nearly out of debt, but another recession may be around the corner
After years of wrangling with a straitened budget, the city of Chico had good news to share with the public on that front. During Tuesday’s regular City Council meeting, City Manager Mark Orme got up from his usual seat near the dais and stood at the podium to announce that the city will eliminate its general fund deficit by the end of this fiscal year.
Orme appeared excited to make the presentation in which he noted the sweeping layoffs that took place in 2012. He praised staff members and the panel for their efforts to manage the years-long financial quagmire. The cuts and an increase in general fund revenues due to a recovering economy have helped bring the books back to (nearly) black.
But Orme rightly urged caution. The bad news is there’s currently no emergency reserve, which means another downturn in the economy would threaten the city’s solvency. Recessions are cyclical, after all, and another one is predicted in 2018. Additionally, as we’ve learned through the dissolution of California redevelopment agencies, the state has a history of taking money from local governments.
City leaders must continue their cautiously optimistic stance and be prepared for another fiscal crisis.