Audit shows Atwater’s progress in recovery from deficit

A financial audit from an independent accounting firm this week comes as a reminder of the difficult financial conditions for the city of Atwater, which has been working its way back from the brink of bankruptcy since 2012.

Officials contended Tuesday that the city is moving in the right direction, albeit slowly, as it pays down deficits of $3.6 million in the general fund and $3.1 million in the sanitation fund, which began to accumulate in 2008.

The annual audit was delivered Monday at the regular meeting of the City Council by JJACPA Inc., a Dublin accounting firm. The firm warned the city that it continues to operate with those deficits.

Lakhwinder Deol, Atwater’s finance operations manager, said the city has continued to pay down its deficit since 2012, when it laid off 40 percent of its employees.

“We are coming out of this deficit,” she said. “It’s just recovery is taking longer than we expected.”

She noted that the city finished the fiscal years of 2014 and 2015 with surpluses of $334,000 and $552,000, respectively.

The city of about 29,000 people has a $40 million budget, she said. As in many cities in the state, revenue from the gas tax in Atwater have continued to trend downward as vehicles become more fuel efficient.

Mayor Jim Price said the city is continuing its tightrope walk to provide services while paying down the deficit.

“It’s something we all inherited when we came on board,” he said. “We all had huge aspirations of trying to turn it around.”

Price was elected in 2014 along with Councilmen Brian Raymond and James Vineyard.

Unforeseen expenses continue to wear on the city’s bank account, Price said. Adding new patrol cars to the police force, upticks in public employee pensions and other expenses continue to increase faster than the city can gain new revenue, he said.

The city also has a need for an estimated $20 million in street repairs and Americans with Disabilities Act improvements, staff members have said.

Atwater officials plan workshops in April to brainstorm ways to add revenue.

“I’m telling the council, come with ideas for revenue,” Price said. “That’s what we need; not more cutbacks.”

Atwater declared a common-law fiscal emergency, which is a precursor to bankruptcy, in October 2012.

This story was originally published March 15, 2016 at 6:53 PM with the headline "Audit shows Atwater’s progress in recovery from deficit."