Council points fingers

Once again, former leaders of the city of Chico—in particular City Manager Dave Burkland and Finance Director Jennifer Hennessy, along with the city councils in place from 2007 to 2012—have been blamed, to a significant extent, for the financial crisis the city now faces.

This time it was the current council members pointing fingers.

At its meeting Tuesday (Sept. 2), in its legally mandated response to the 2013-14 Butte County Grand Jury report, the council voted, 6-1, with Councilwoman Ann Schwab dissenting, to acknowledge that it agreed with nearly all of the jury’s findings critical of the city’s handling of the crisis.

On the positive side, the council agreed with the jury that nobody broke the law or enjoyed personal gain as a result of actions taken. And it acknowledged that the Great Recession and the decrease in tax revenues that resulted, as well as the state’s commandeering of redevelopment and other funds, were the primary causes of the crisis.

The council also went to great lengths to point out that, in 2012, when it became aware of the severity of the problem, it took steps to bring in a new administrative team (headed by Brian Nakamura) and told it to right the ship.

But the council also agreed with the sometimes harsh indictments of prior administrators and councils—including councils on which three of them, Schwab, Mary Goloff and Mayor Scott Gruendl, served—for compounding the problem.

Specifically, the current council agreed that the “[previous] City Council failed in its fiduciary duty and oversight duties.” City administrators hid the scope of the problem, and the council failed to “dig into the data,” as Vice Mayor Mark Sorensen put it, to see what was going on.

As a result, the city was allowed “to deficit spend for many years, accumulate [internal] debt and erode its cash position to dangerous levels. All while being told that the General Fund was generally balanced each year.”

Interestingly, city staff had recommended a softer response to the grand jury finding, one that disagreed with it, pointing out that since 2012 the city had been working to solve the fiscal problems.

The current council also agreed that upper management “failed to share complete and accurate information with council members.” It noted, however, that the new city administration has implemented timelier budget reports.

The council also agreed that, “[w]ith respect to finances, it appears that the prior City Manager [Burkland] abdicated his responsibility and allowed the Finance Director [Hennessy] to take charge.” Piling on, the council noted something not mentioned in the finding: that the city manager also had failed to follow a City Charter mandate requiring him to “keep the council advised of the financial condition and future needs of the city ….”

The grand jury questioned the generous pay packages enjoyed by upper management. In response, the council noted that in 2013 it increased its authority over budget appropriations.

The only finding with which the council disagreed was the jury’s contention that a “council-manager model of governing [such as Chico’s] leads itself to potential problems.”

Every form of government has potential weaknesses, the council noted, adding that it “does not believe the council-manager form of government, the most popular in the country, is more prone to these weaknesses than others.”

The grand jury made a number of recommendations that the council either agreed to implement or already had implemented. Among them were calls for greater transparency in city government, better training for new council members, contract adjustments to bring down the city’s high salaries, and better controls over enterprise funds.

The council disagreed with one recommendation, that the city “rehire lost staff when funds become available, instead of contracting out for services.” The city needs to maintain flexibility and keep its options open, the council stated.

This is an election year, and Sorensen and Gruendl are both up for re-election. That wasn’t mentioned during discussion of the grand jury report, but it surely was on people’s minds. Conservative gadfly Loretta Torres, for example, once again lashed out at Gruendl for his alleged “mismanagement” while calling Sorensen “a hero” for having uncovered it.

For his part, Gruendl has insisted that he was as hornswoggled by Burkland and Hennessy as everybody else. Since his awakening, he insists, he has brought all his considerable experience and expertise to bear on rectifying the situation.

Local attorney Mike Bush urged the council to reject the grand jury report in its entirety. It’s compromised by the fact that the jury’s foreman (Chuck Nelson) was a former mayor of Chico at a time when the deficit was already developing and therefore incapable of being objective.

Regular council attendee Sharon Chambers may have put it best, however: “I think it should just go away and we’ll have peace.”