Nakamura has Budget Answers?
In a March 4, 2013 letter to the City Council, Brian Nakamura wrote: “I believe that the financial condition of the City of Hemet can be verified on-line, along with the fact that it was also confirmed during the interview process.”
I went and looked this up, as Brian suggested. Recent news articles have reported there is an ongoing deficit in the Hemet general fund; however, according to the mayor we can’t really believe what the media reports. Fortunately I had also gone to the official City of Hemet website and downloaded Nakamura’s 2012-13 Budget Message to the City Council that pretty well spells out what happened there.
Here are some quotes from that document:
“In FY 2008-09 the City utilized approximately $3.9 million of the General Fund reserve.”
“For FY 2009-10 alone, the Council approved approximately $1.6 million in expenditure reductions, employee concessions and revenue enhancements. Despite these efforts, the continued drop in resources required the City to use virtually all of its remaining reserve of approximately $2.5 million to balance the FY 2009-10 budget.”
“Adoption of the FY 2010-11 budget, once again, included measures to eliminate a deficit, this time of approximately $5 million, through more cuts to positions, employee concessions and acceptance of public safety grants.”
“In the current FY 2011-12 budget, the City’s General Fund finally saw a healthy reserve of over $12 million and a structurally balanced budget due to a citywide reorganization, employee contributions toward pension costs, and, most significantly, the franchise of the City’s in-house refuse operation… which provided the City with an up-front payment of $12.5 million and ongoing payments of at least $3.34 million annually for the next twenty years.”
“Preliminary FY 2012-13 Budget. The presented budget included a combined general fund structural deficit of approximately $3.5 million, as a direct result of the loss of the City’s Redevelopment Agency and Public Safety grants. Of the approximate $3.5 million shortfall, the preliminary budget utilized approximately $2.1 million in one-time available monies (approximately $1.3 million from excess fund balances from various internal service funds and $800,000 of residual refuse funds), leaving a $1.4 million shortfall to be covered by reserve funds….Closing that gap was achieved (as discussed above) with use of $2.1 million of one-time monies, $1.2 million in expenditure reductions, and use of $199,500 from reserves.”
“If the economy does not significantly improve and/or expenditure are not reduced, the City may find itself facing, at a minimum, an estimated structural deficit in FY 2013-14 in the range of $2.5 million to $3 million.”
To sum up, Hemet did everything Chico had already done and still ended up with a structural deficit in its general fund. Unfortunately, Chico does not have a refuse franchise it can sell for $12.5 million to restore its reserves.
I really urge you to take another look at what is happening to our beloved Chico culture. For the price of Nakamura and his quarter million dollar severance agreement, the Council has sold what is most important about Chico down the river. It is shameful that the goodness of ‘the Chico way’ appears to be headed for ruins — and there is still nothing to sell for $12.5 million.