The city of Atwater will be formally monitored by the state over the next six months while leaders try to get control of the city’s financial problems that have lingered for years, according to officials.
Representatives of the city appeared on Wednesday before the state’s Joint Legislative Audit Committee to address concerns related to Atwater’s financial solvency.
The city has a $2.4 million general fund debt and $7.7 million in unfunded retirement liabilities. It also owes $2.3 million to its own sewer fund.
The committee granted a request from city leaders to be part of a monitoring program to avoid a “high-risk audit,” a move that would have put a crimp in the city’s ability to engage in “meaningful economic development and attract quality employees,” according to a news release.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
Being monitored rather than audited was seen as a win for the city, according to leaders. State Sen. Anthony Cannella intervened on behalf of the city and “recognized the extraordinary steps” taken to improve the financial outlooks in the past several months, according to Interim City Manager Lori Waterman.
“Our goal is to provide a transparent path to achieving our long-term goal – re-establishing our general fund reserves and creating a financially viable city,” she said.
The Atwater City Council adopted a $13.9 million spending plan in June with projections to put more than $1.2 million towards its longstanding debt while making a number of cuts to services, according to officials.
City staffers said they are looking at a “conservative estimate” of $1 million in sales of property owned by the city and another $200,000 to be collected from new marijuana-based businesses, according to the plan. The new revenues are tied to paying down its debt.
During the next six months, an auditor will review the city’s progress on paying down debt and report back to the state committee in 2019, according to a news release.
City Council members Brian Raymond and Cindy Vierra met with Cannella prior to the hearing, according to a news release.
“We are finally on a path I can fully support with the entire council’s commitment to establishing sound fiscal policies that include paying down debt, updating our fee schedules and providing the public with a completely transparent process to get us back on track,” Raymond said. “Today was a win for the city and our residents.”
The city will likely appear before the state committee in the spring of 2019 to review and whether an audit is required, according to a news release.