This is meant to be a conversation starter…. My position on our City’s current financial condition - we need to behave as if we are in a fiscal emergency if we are going to declare a fiscal emergency. To me that means making cuts that that are necessary for the FY 13/14 budget to end with a responsible fund balance. The city council was presented with four options on Tuesday, June 11th and of the options presented, the only one that I could support was option #1 since this option is the only one that fully addresses the revenue shortfall that Grand Terrace is facing. That option included difficult cuts such as law enforcement patrol hours and park maintenance. At the beginning of this current fiscal year, our projections showed we would end with a fund balance of over $800,000 – that means we should have about $800K in the bank right now. This amount would have easily carried us through the end of 2013 without the need for any cuts in the budget for the next five months (July – November). This would have allowed us to wait for the people’s decision on a proposed tax measure to determine whether cuts would be made. At the end of this year, the council working with staff would have been able to adjust the budget for the remainder of the fiscal year (Dec ’13 – June ’14) if the majority of the voters decided not to pass a tax measure this year. As this past year progressed, we have encountered consequences associated with a large mistake made with the last refinancing of our Civic Center. This refinancing blunder is the direct cause of the State Department of Finance to disallow our mortgage payment as an enforceable obligation paid for by the Successor Agency. The City’s budget had counted on the Successor Agency continuing to pay for what the Redevelopment Agency paid for in years past. What this means for the coming budget year and all future budgets, is that the mortgage payment will now be paid for out of the City’s General Fund. That and other disallowed expenses have significantly reduced the amount of our ending General Fund balance by about $500,000 from this point forward. These dis-allowances have pared our $800K amount down to approximately $300k – to the point where we as a City lost the option of not making cuts. Quite simply, we cannot make it to the end of next FY in June 2014 without significant cuts. In my opinion the hits to the General Fund, causing the reduction of our ending fund balance by $500,000, limit our options and have created the necessity of changing the plan going forward regarding the balanced budget we must approve. My definition of a balanced budget is simply not spending money we don’t have. It is my position that cuts are necessary; I am not serving the people of Grand Terrace if I am not being fiscally responsible in funding the city’s essential services; and I cannot in good conscience approve a budget that counts on a proposed tax measure as if it is a guaranteed source of revenue. In my perspective, not making cuts is like bidding on a project and spending money on materials for the project before it has been awarded. Therefore I believe it is disingenuous to declare a fiscal emergency and not behave accordingly. Regarding the belief, some have, that not declaring a fiscal emergency immediately means that citizens will never have a chance to vote; the declaration is only necessary to place a revenue measure before the voters in November 2013. Without declaration of a fiscal emergency, a revenue measure can be considered during the City’s next regularly scheduled election in November 2014; but most importantly, this is not what I am advocating. The city council must declare a fiscal emergency before August for the tax measure to be placed on November 2013 ballot to give the voters of Grand Terrace a chance to decide. As far as I am concerned, the negotiations for the final budget are not over – there is still work to be done and we have some time, not much, but some time to do that important work. Finally, I would like to solicit all opinions and constructive feedback. This is one of the ways we can get more people involved in the conversation. I would also like to invite all of you to read the documents related to the budget process and discuss it with your family, your friends and your neighbors. This is one of the most important decisions you will have to make since the founding of our City. I am able to discuss this you in person or on the phone. Additionally, I keep regular office hours at City Hall to facilitate face-to-face meetings. Respectfully, Darcy McNaboe, Councilmember, City of Grand Terrace, California.
Posted on: Sat, 15 Jun 2013 16:36:31 +0000