Budget Issues

By Kristin Parisi

The City has taken some steps to address this years estimated $1.7 Million deficit. Nearly $500,000 more in fixes may be needed. Here are some related budget issues.

Glendora's budget plight is partly related to the general economic downtown. However, it's partly related to decisions of the incumbent council.

The question of whether a budget is "balanced" is somewhat misleading, because the city MUST adopt a balanced budget. So, when councilmembers boast they've passed a balanced budget, they're right. However, the devil's in the details of what transpires throughout a fiscal year, whether our revenues are coming in as expected, or not. If not, what are we doing to control expenses, to keep spending from outpacing revenue? Is the city spending down the reserves? Are transfers between funds masking a problem? Do we carry too much debt?

Last fiscal year closed with a small deficit of $159,000.

This year, our Finance Department projects a $1.7 million budget deficit. The Council approved Staff's recommended actions to meet all but $536,710 of the estimated deficit at the 2/10/09 meeting.

The Finance Department has been clear, the economic downturn is expected to last 2 more years and we may be looking at employee layoffs and service cuts.

City Councils make both short and long term decisions that affect our budget and the City's long-term financial stability. Now, we may be facing reductions in staff and service cuts. We need people on the council who will do their homework, and make sound, sensitive decisions. We need people on the council who will make sure that the burden is shared, and not forced on one segment of the work force.

The current council has made several decisions that have raised red flags as to how Glendora's financial stability and long-term health might be affected:

1) In their zeal to obtain the political endorsement of law enforcement personnel, the Council approved a 3% @ 50 retirement formula. Each year the "Present Value of Benefits" or PVB is calculated to reflect the amount needed today to fund all future benefits for current members of the plan. The Accrued Liability to be paid by us in the next 20 years to fund the increased retirement formula commitment immediately rose $4.6 MILLION the year the council made this decision. PLUS, we almost immediately lost over a dozen highly experienced officers who took the opportunity to move on.

2) Over repeated objections of the public, the Council unanimously approved a NO-BID, 15 YEAR CONTRACT with Athens Trash which allowed Athens, IN VIOLATION OF OUR MUNICIPAL CODE, to bill us in advance for services. Because the public objected, the practice has stopped, but the money illegally obtained from residents was never returned or credited.

3) To increase the city's revenue stream, the Council raised water rates, overhauled the Fee Schedule for city services, and contracted out parking enforcement. Glendora's residents carry these burdens. AT THE SAME TIME, the Council has continued its pattern of giveways to developers. For example:

o The Council allowed the Diamond Ridge Owner to place a freeway sign on public parkland FOR FREE.

o Over 10 acres of public parkland have been leased out for 15 years to a commercial nursery, at a rate favorable to the nursery, regardless of the safety concerns and impacts on the recreational users of the public's wilderness parks.

4) Repeated Water Rate increases are based on the dire conditions of the infrastructure. YET, in this time of economic downturn for the general public, as well as possible city employee layoffs and service cuts, the Council has approved the CITY GOING OUT TO BID ON CONSTRUCTION OF A NEW OFFICE BUILDING AT THE CITY WATER YARD.

5) The Council GAVE THEMSELVES A RAISE, more than doubling their salary and benefits from the 04-05 level to now.

6) The Council spent $18,000 TO REMODEL THE COUNCIL CHAMBERS. There must have been some objection to the "Reserved for Council Member" parking in the City Hall parking lot, as those have now been removed.

7) The Council just approved transfers of $500,000 from the General Fund to both the Workers' Comp Fund and General Liability Fund. The Finance Department projects both funds will be depleted in 2010 and 2011 respectively.

8) This Council has approved over $6 MILLION in Redevelopment Bonds to assist Diamond Ridge. It has approved $15 MILLION in Pension Bonds to cover liabilities. It has approved $30 MILLION in Water Bonds. The Council has never clearly and simply stated to the public the true cost of these bonds or when they will be paid off, and have, in fact, in some cases included language which allows them to sell more bonds as needed. There's no controls!

9) The City needs to increase its revenues, but needs to do it thoughtfully. The Council is so eager to increase sales tax it has focused almost exclusively on the Marketplace/Diamond Ridge area without careful consideration of the impacts on other business districts + The Village, Route 66, Grand, Arrow Highway. The amount and quality of support given to the major national retailers has outstripped the support for small businesses.

We need people on the council capable of working toward balance and the right mix for the community as opposed to having dollar signs in their eyes.

We need people who can carefully and fairly assess where and how to make budget cuts as needed.

We need people who can control unnecessary spending and provide oversight and accountability to the spending of millions of our tax dollars.

Kristin Parisi will do these things for Glendora.