Atwater considers declaring fiscal emergency

mnorth@mercedsunstar.comSeptember 20, 2012 

— City officials reaffirmed their precarious financial condition Wednesday as city council members considered declaring a fiscal emergency during a special meeting that started more than two hours late.

Though the council didn't declare a fiscal emergency Wednesday, the public hearing on that item was continued until an Oct. 3 meeting.

The pending move signals some major changes ahead for Atwater.

The city's general fund deficit totals more than $3 million and reserves are gone. The city considered declaring a fiscal emergency Wednesday night because unless immediate actions are taken to make cuts and balance the budget, vital services needed to protect the health and safety of residents could end up unfunded and compromised, according to a city report.

"These are unprecedented times and represent uncertainties not seen nor experienced since the Great Depression," according to the report.

The council chamber was crowded Wednesday evening and chairs were lined up outside to accommodate the overflow. While many residents and city employees showed up, some left before the meeting started because of the council's tardiness.

Before the meeting, the council met in closed session for a conference with legal counsel and discussed labor negotiations. The closed session resumed after the open meeting recessed at 8 p.m., but no report was made by the Sun-Star's deadline.

Toward the end of the open meeting, City Attorney Jose Sanchez announced that he's resigning from his position so he and his law firm, Meyers Nave, can serve as special counsel to the city. The move allows the city to hire another attorney to work on day-to-day items.

Meyers Nave will drop the position within 30 days, or when the city finds another attorney for the spot.

"The city is facing a fiscal crisis," Sanchez said during Wednesday's meeting. "It requires significant and specialized legal services. Getting through this crisis will require the City Council to make tough decisions and to take the advice of specialized attorneys and other professionals."

Frank Pietro, interim city manager and police chief, said the poor economy coupled with budgetary difficulties have created serious problems. "Though it was anticipated that the economy would recover by now, this recovery has not materialized," he said. "At the same time, the city continues to face increasing costs in its personnel budget, including wage, pension and other fringe benefit costs."

However, Nancy Vinson, a business agent with the AFSCME, which represents unionized public works employees and clerical workers in Atwater, disagreed with the city's financial assessment.

Vinson described the city's report as "a whole bunch of smoke and mirrors."

"What you have failed to act on in your enterprise fund with your water and your garbage has led you to this, and to say that now this is caused because of the overall economy or the cost of your personnel is incorrect," she said.

Vinson mentioned that union members have been willing to negotiate and have taken pay cuts. She said "the union is prepared to fight back" and could start a recall effort.

Despite that claim, Councilman Jeff Rivero said he's been told by the city's finance director that no monies have come from the general fund over the past five years to pay for either of those restricted funds.

Reporter Mike North can be reached at (209) 385-2453 or mnorth@mercedsunstar.com.

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