‘Magical’ money

Did the city manager and city finance director pull a fast one? Did they, with the connivance of the City Council, mislead people about the budget deficit the city faced in March that required the temporary closure of a fire station?

That’s the question a number of people—including some firefighters and tea party activists, as well as a certain City Council candidate—have been asking, in ways both direct and indirect, since Fire Station 5 closed in April. And it’s why at its last meeting, on May 15, the council agreed to discuss the budgetary decisions leading to the closure at its meeting on Tuesday (June 5).

Complicating the discussion was the fact that in the interim the city had managed to come up with sufficient funds to reopen the station on June 1, a month earlier than expected. While this made Fire Chief Jim Beery happy, it seemed to make others more suspicious. As one person asked, where did this money “magically” come from?

Introducing the discussion, City Manager Dave Burkland noted, “This has been a pretty tough year.” After four years of declining revenues, he explained, the state reclaimed the city’s share of vehicle-license-fee revenue and dissolved its redevelopment agency, a one-two punch to the city’s fiscal body.

Because it’s so hard to predict revenues, he said, it wasn’t until February that he and Finance Director Jennifer Hennessy saw that the city was about $900,000 short in fiscal year 2011-12. That’s when they put together a plan to reduce costs for all departments through June.

For her part, Hennessy said all fiscal projections amount to “educated guesses,” given the volatility of the economy and the lag time—three months, in some cases—for obtaining revenues from the state.

Overall, her revenue projections were off by $300,000. That, added to increased expenses, created the shortfall.

“In these situations,” Burkland said, “it’s impossible to resolve the problem without reductions in public safety,” which comprises 78 percent of the city budget. So he went to the chiefs and challenged them to make cuts. In Beery’s case, the amount was $95,000.

Beery explained that he’d decided to prioritize maintaining sufficient “truck weight”—that is, keeping the standard four firefighters on each truck—for the sake of safety. “I lost my best friend to a roof collapse several years ago,” he said. “I was not going to let that happen here.”

His decision was to close Fire Station 5, which serves the most limited response area of the city’s six stations. “It was not something I wanted to do, but I really had no choice,” he said.

Councilman Mark Sorensen was puzzled by the chain of events. In January, he said, members of the city’s Finance Committee had been told the budget was balanced, but all of a sudden in March it was $900,000 in the hole. Where, he asked, was the cost overrun? And how did the city fill the gap a month early?

Hennessy replied that the budget gap was primarily due to increased use of overtime in the Police and Fire departments. By reducing overtime and cutting positions, the city was able to save $300,000. The rest of the money came from fund transfers and reduced spending on supplies.

One speaker, the Rev. Laurel Tower, representing the Butte Taxpayers Alliance, said her group was “very concerned by the fluctuating figures” and wanted to know when the city books would be audited. This prompted Vice Mayor Jim Walker to point out that the city’s books are audited annually by independent auditors and “they’ve never found anything wrong.”

Council candidate Toby Schindelbeck, who in the past has accused the council of shutting down the fire station, wasn’t buying Hennessy’s presentation. “As a taxpayer,” he proclaimed, “this process has been absolutely horrifying.” Like Sorensen, he questioned how the city’s figures could go from “worst case break-even” to “suddenly $900,000 over budget.”

One speaker, Ron Husa, complained that “every time something happens to the budget, police and fire are cut.” This prompted Councilman Scott Gruendl to note that, while the Police and Fire departments have taken cuts of around 10 percent, other departments have been cut by 30 percent to 50 percent.

After the discussion, Assistant City Manager John Rucker turned to me, saying, “If they only knew how much time and energy has gone into keeping this city solvent under the circumstances. It’s really kind of amazing.”

Setting the clerk free: Scott Gruendl has an idea: Let’s change the city charter so the city clerk reports to the City Council, not to the city manager. He’d like a public vote on the issue.

For most of Chico’s history, he said, the clerk did report to the council. In 1994, however, as part of a cleanup of the charter, the position was put under the city manager.

Some council members liked the idea, others were skeptical. Dave Burkland, who is retiring in August, was non-committal.

In the end the council decided unanimously, with Councilwoman Mary Goloff absent, to begin the process of putting it on the November ballot. A public hearing will be scheduled for early July.