Counting on future economic growth and fee increases the Madera City Council has unanimously passed the city’s 2018-2019 budget with a $1.3 million dollar deficit, based on the recommendations of current City Administrator Steve Frazier, according to a presentation before the council, on the off calendar Thursday July 5th city council meeting.
Frazier, chief of The Madera Police Department for the last five years, who retired in December, was appointed to the permanent position after the abrupt retirement of longtime city administrator David Tooley in December, when annual salaries and benefits for some senior city department heads of between $200,000 and $310,000, some of the highest in the Central Valley, were brought to light.
Frazier has agreed to fill the position of city manager until a permanent, professional city manager could be recruited and hired.
That search remains under way. Frazier said he and the finance department team had reduced the deficit projections from $1.5 million to $1.3 million through a judicious budget review but he could not recommend further reducing services to residents when the deficit situation would likely work itself out through pending development projects and a growing business climate and economy.
The city had recently trimmed some spending and frozen 11 employee positions that had become vacant in the last year, which had resulted in significant savings, Frazier said, but in his opinion the action may not have been necessary and had reduced good service delivery to residents.
“We are still at $1.3 million dollars (of deficit.) In the last five years we’ve had deficit (projections) and we’ve managed to erase that. When the opportunity presented itself, I told myself I was not going to say the sky is falling... We have an innate ability to reduce deficits. And we’ve ended (previous) years with a $1.3 surplus. A very significant turn-around. For the life of me ... there really isn’t an explanation how we do that. Things just seem to work out ...” Frazier said. “So I am reluctant to offer to council we (continue to) freeze (vacant) positions.” Frazier said.
Currently there are three vacant police officer positions, one position in engineering, one in code enforcement, two in public works positions, among other part time positions not being filled, he said.
“I would feel awful silly if I sat here, (and) I won’t be here, but if I (were to) advocate for the freezing of these 11 positions and then we erase the deficit again. My recommendation to you is that you accept the $1.3 million deficit and ride it out. We have reserves. If we realize that deficit then we know where we are at. Clearly we have a revenue-expenditure disparity. That’s very evident. But I am reluctant to say make the drastic cuts now ... “ Frazier said.
Raising Development Impact Fees, and other fees such as city business licensing fees will also be huge according to Frazier.
“I’ve challenged employees to come up with (new) revenue-raising plans (for services provided to residents). Very, very good options, we’ll be moving forward on the fees we (collect). Like business licensing fees ... We need to explore (all) revenue-raising options ... And see where things end up,” Fraizer said.
Some residents claim costs usually borne by cities — like street tree maintenance or removal, and sidewalk maintenance, have been shifted to the backs of Madera residents and property owners, a significant benefit to the general fund. They also allege Measure K tax dollars are being used to back fill or relieve the city’s general operating fund of it’s routine expenses, like existing police officers’ salaries and the purchasing of standard police replacement equipment.
Resident, developer and city financial critic Mike Pistoresi said the city’s focus appears to now be only on raising fees and all revenues possible. He said the city has conveniently overlooked the more obvious and responsible method of reducing the senior staff salaries that had been quietly raised between 20 and 49 percent over the last five or six years. Pistoresi first brought the city salary increases to light in December of 2017, shocking many in the community, after researching them on Transparent California’s salary database website.
“There is absolutely no excuse for the council to adopt a deficit budget when by trimming management positions and salaries they could have very easily achieved a balanced budget,”
Pistoresi said. “Transferring money from the (reserve) or rainy day fund to the general fund, does not achieve a balanced budget. It is like digging into your savings account to pay your monthly bills when you do not have enough income. It only works until your savings runs out,” he said.
The city has also doubled its water rates and doubled its water fund revenue from approximately $5 million to $10 million, according to Pistoresi, and outside consultants hired by Pistoresi allegedly found the city collected close to a million dollars for a water “conservation rebate” program but had paid out only approximately $24,000.
Council Members CeCe Gallegos and Derek Robinson also disagreed with the revenue-raising-only plan, and said they thought city sacrifices were needed now to ensure future balanced budgets. “It’s like at home, when you have financial difficulties you do a lot of cutting. You stop going to movies, dinners, you cook at home. You sacrifice,” to be able to operate within your means, Robinson said.
Some critics also claim no five-year city budget or revenue projection was developed or looked at during the budget process and all possible reductions and savings are needed right now, to decrease the more drastic cuts and actions that will be required in future years.