A special meeting to discuss the city’s finances has some of its members calling to declare a “fiscal emergency” in the city budget.
The mayor, four members of the City Council and the city’s department heads met to look at the books and brainstorm ways to handle looming expenses while dealing with a $3.7 million general fund debt, among other unfunded obligations.
The city, which has a budget of $43.9 million, also owes about $4 million to an internal water fund it borrowed from to pay for other city services. Then there’s the roughly $21 million owed to the pensions of retired city employees, a cost leaders have considered refinancing.
Councilman Paul Creighton said he came away from the meeting still unclear about the scope of Atwater’s debt. “Our financial situation is scary,” he said. “We’re millions, millions and millions of dollars in debt, and nobody knows the true number.”
Our financial situation is scary. We’re millions, millions and millions of dollars in debt, and nobody knows the true number.
Councilman Paul Creighton
Creighton said the City Council should officially declare the finances a “fiscal emergency,” a move he said would send a clear message to residents. He said the emergency status also would aid the city when it comes to negotiations on contracts with the state Department of Forestry and Fire Protection and Allied Waste, two contracts that will soon be up for renewal.
Atwater has struggled financially since the Great Recession and housing market crash of about 10 years ago. The city declared a common-law fiscal emergency, which is a precursor to bankruptcy, in October 2012.
Mayor Jim Price came away from the meeting with a decidedly different take than Creighton. “I’m very upbeat about it today, much more now than going in,” Price said.
Bringing department heads into the meeting was an effort to get everybody on the same page. “We’re not in a situation like a bankruptcy or anything like that,” Price said. “We’ve got some serious challenges but they’re not challenges that can’t be dealt with.”
$21 millionThe amount Atwater owes to the pensions of retired city employees
Councilman Brian Raymond disagreed, saying the city’s finances are in an emergency state, and residents need to see it. “We have to get it out in the open,” he said. “And, we have to start a dialogue about this.”
On a positive note, he added, the City Council and department heads were able to talk and see that they have many of the same goals. He pointed to discussion about reining in debt, but also attracting new industry to Atwater.
The department heads in Atwater took turns naming their needs, which included new equipment, employees and other expenses. Scott McBride, the interim city manager, said he wanted the meeting to clear up any miscommunication between staff and the council.
“I want to be honest in telling you what we know,” he said.