Righting the ship

Council adopts new budget policies

Nancy Henry (left) and Mary Kennedy bring their Tea Party messages to City Hall.

Nancy Henry (left) and Mary Kennedy bring their Tea Party messages to City Hall.

Photo By tom gascoyne

After hearing an invocation delivered by an insurance salesman, a tribute to a local auto body shop, and the mayor’s emotional resignation (see “Musical chairs,” page 10), the Chico City Council unanimously adopted three budget policies Tuesday (Aug. 6) that will alter the city’s process of making decisions regarding revenue and spending.

In front of a packed house that included a couple dozen city employees wearing red T-shirts and harboring concerns about job stability and union contracts, the council voted to approve budget policies for the 2013-14 fiscal year, hire a consultant to look into generating temporary cash flow—called a tax revenue anticipation note—to help cover city costs between November and next April, and hire two police officers and retain two community-service officers who were slated for layoffs.

The new team of managers—Administrative Services Director Chris Constantin, City Manager Brian Nakamura and Assistant City Manager Mark Orme—has dramatically changed the structure of city government, reducing departments from 11 to five, laying off employees, and telling the council the city is broke after years of spending money like the proverbial drunken sailor.

The dramatic alterations have drawn the ire of both city employees and the general public, suspicious of their true motives and devotion to Chico, and their concerns were voiced throughout the meeting.

The first budget-related item of the evening was actually adopted during consideration of the consent agenda—those items, as the council agenda states, “considered routine and [usually] enacted by one motion.” In this case, the council pulled, considered and approved a motion to hire a consultant to look into creating a franchise agreement with the city’s two waste haulers—Waste Management Inc. and Recology.

Currently, the city of Chico has what is called a “fee agreement,” which generates $160,000 annually in revenue for the city. A franchise agreement could increase that revenue to as much as $1.5 million or more, said Nakamura. It would also set up specific routes for the two companies to lessen the number of repeat trips the heavy garbage trucks travel on the city’s streets.

“Most cities do have franchise agreements with their haulers, and it is more and more common,” Nakamura said.

But some members of the public questioned the move, noting Nakamura had dealt with the same consultant—R3 Consulting Group Inc.—when he was working for the city of Hemet.

“Consultants are hired to tell us what we want to hear,” said Mark Herrera, a member of the Bidwell Park and Playground Commission. “Why bother when our city manager has already gone through this?” Audience member Randy Coy added that, while the franchise will be a source of revenue for the city, waste-hauling rates will increase.

Nakamura explained that a franchise agreement is needed as a potential source of revenue for a city that may not be able to meet payroll in December.

Local activist Jessica Allen questioned the need for the franchise agreement as well.

“People in Hemet are very unhappy,” she said. “Why would we follow the same path?”

The council then voted unanimously to contract with R3 for $14,500 to explore the possible franchise.

Constantin then advised the council that the city has $3 million less in “spendable” cash than last year, and that the Chico Police Department payroll is 2 percent over where it should be at this time. Meanwhile, the Fire Department payroll is 11 percent over what it should be, in spite of some savings from the reduction of staff at Fire Station 3 at the Chico Municipal Airport.

The two new police officers, who will attend six months of training before hitting the streets, will be paid for in part by cutting 270 hours in current overtime pay, a hit Police Chief Kirk Trostle accepted as part of the city’s economic reality.

“We’ll work with what we get,” he said.

Constantin told the council that budget changes made in June hold staff more accountable to the council and the public. “This puts you in the driver’s seat as far as where spending actually goes,” he said. “This isn’t the last time we’ll see policy changes. This is an ongoing project.”