ATWATER -- All city employees were called to a meeting Thursday morning for a briefing on the financial crisis there, which could result in significant staff reductions and possible bankruptcy.
Frank Pietro, acting city manager and police chief, City Attorney Jose Sanchez and Finance Director Glen Carrington spoke to the employees inside the crowded City Council chamber. The 40-minute meeting wasn't open to the public.
Sanchez said the city is working diligently to prevent bankruptcy or layoffs. But the available options aren't very good.
"I wish I was coming here to give you some better news," he said, noting that the city is looking at ways to "drastically reduce the budget."
Closing a fire station, laying off employees, reducing pay, reducing benefits, personnel restructuring and selling real estate owned by the city are some of the options being considered.
The city might crack down on residents who aren't paying for their city-provided services.
'Not a fun time'
Pietro said the city's finances aren't getting any better. "This is not a fun time for me since I've taken over this job," he said as the meeting started. "The city is in financial devastation, ladies and gentlemen."
City Manager Kathy Kivley was put on administrative leave late last month.
The city is projecting a $3.7 million negative general fund balance for the 2012-13 fiscal year.
In addition to the general fund, the sanitation and water funds have deficits.
Initially, the employees in attendance Thursday varied in emotion -- some were stoic and expressionless, while others appeared jovial and talkative leading up to the meeting.
But their attitudes changed when Pietro, Sanchez and Carrington started fielding questions.
Employees lambasted City Council members, who weren't present during the meeting.
"They've known for a long time," one employee yelled out. "They've destroyed us."
When one employee tried to reason with the crowd and explain that economic hardships aren't unique to Atwater and the council isn't solely to blame, another shouted, "It's the council's fault for this whole thing!"
According to Councilman Gary Frago, the city won't end up choosing bankruptcy despite the murmurs about taking that route.
"Bankruptcy has not been mentioned, discussed or even talked about," Frago said. "Bankruptcy is not in the picture."
During a special meeting last month, the City Council selected a Danville consulting firm, Municipal Resource Group, to provide a financial assessment as the council considers passing a budget.
It's likely that the city will wait for that report before making any major decisions, Frago said. It's expected to be completed within 30 days.
"We don't know where our money's at," he noted. "Staff hasn't been able to tell us. That's why we've hired this firm to come in and do an audit, and tell us exactly where our money's at, how it's been spent, how it's been transferred."
Frago added that the city hasn't gotten its annual audit back for the 2010-11 fiscal year.
Part of Thursday's employee meeting was to gather input and present them with possibilities to resolve the budget issues.
"These are all suggestions," Frago said. "Nothing's etched in stone."
Council pay and benefits have been targeted by the public as an area to make cuts. With the exception of Craig Mooneyham, council members make about $660 a month after taxes.
Councilman Jeff Rivero said "everything is on the table," including council pay and benefits.
In about two weeks, city administrators expect a special meeting with a resolution on the agenda declaring a fiscal emergency in Atwater.
Reporter Mike North can be reached at (209) 385-2453 or email@example.com.
Atwater: At A Glance
Land area: 6.1 square miles
Median household income: $42,226
Projected revenues for fiscal year 2011-12: $9.2 million
Projected expenses for fiscal year 2011-12: $12 million