Atwater CA financial health is improving, audit shows
City staffers in Atwater say they’ve combed through the city’s finances to find savings wherever they can – which they have – but the financial outlook remains difficult.
City Council, staffers and other leaders met in a workshop Tuesday, one of a series of meetings, to discuss how the city can improve its standing.
Atwater has struggled financially in recent years, verging on bankruptcy in 2012, and is dealing with a $2.8 million general fund debt, among other unfunded obligations, according to acting City Manager Scott McBride.
The city is looking at refinancing bonds, changes in daily business practices, new revenues and other efforts to save or bring in tax dollars. It may take an “extreme decision” or “state intervention” to right the ship, Mcbride said.
“We don’t have a hiring freeze,” McBride said, as an example of savings, “but we’re being careful about filling vacant positions.”
A projection from staffers shows short-term improvements to the debt, but the projections quickly rise and the debt could reach as much as $11.4 million by 2026, assuming no changes to operations. The heaviest weight on the city is rising obligations to the pensions of retired city employees.
About 100 employees receive pensions from the city, according to Transparent California.
Much of the money paid in pensions is supporting already retired workers, Mayor Jim Price said, but the city should look at a way to “stop the bleeding.”
“Privatization, in some respects, is the down and dirty answer,” he said. “I’m not suggesting we do that at this juncture, but it’s the cold hard facts.”
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.
The city could save another half-million dollars by refinancing bonds, according to financial consultant Albert Peche. A portion of that money would go back into the general fund, he said, and other savings would go to other entities like school districts.