By: Mark Sorensen
In what will be of little to no surprise to people who have been closely watching City of Chico finances for the past few years, the news is out that the City has been burning through cash the past several years.
Not little bits of cash, but big piles of cash.
Chico has been burning through more than $20 million in cash in the past 5 fiscal years alone, perhaps earning a distinguished medal of dishonor for achieving a cash burn rate average of $4.1 million per year.
All while saying that everything was just Honky Dory. It wasn’t. It wasn’t even close.
It has been a long known fact, and frequently stated fact that the City of Chico has been spending more than it has been taking in for many years.
To accomplish this feat of financial non-genius the City has been driving down various reserve funds and racking up negative fund balances to maintain the financial charade rather than deal with the current economic reality.
After the November 1st, 2011 Financial update I was so nauseated with the lack of honest and complete disclosure that I spent the entire following weekend writing a 22 page letter (with more than 200 pages of attachments) to the Grand Jury in hope of bringing in some help. Yes, I got an interview, but It didn’t bring in the review that I had hoped. This stuff is just too difficult and time consuming to follow, it seemed, and there was not time in the Grand Jury schedule that year. This year’s Grand Jury seems to have spent more time looking into the situation. We’ll find out in late June when their report is published.
Meanwhile new City Manager Brian Nakamura, Assistant City Manager Mark Orme and new Finance Director Chris Constantin have evaluated the situation in a 4 page summary which chronicles the wake of deficit spending, negative fund balances and cash flow concerns.
Negative city fund balances represent dollars that were spent that the city simply did not have. The city is now nearing a point where those negative fund balances have accumulated into a cash flow problem.
Reckoning day has arrived.
Over the course of the coming weeks some of the techniques that were employed will be chronicled and explained. I dearly hope that it wakes up the voting public. But I remember back to the 2006 election when 3 Council Candidates campaigned on the alarm of the coming city fiscal time-bomb, and 3 who campaigned on the notion that the financial illusion could be sustained. The later won the election.
Even last year a few Council candidates dared to attempt to draw attention to the long time pattern of deficit spending and negative fund balances, but to no avail. Even the CNR wrote this in the edition before election day:
“…..you’d think the council and city staff had driven the city to the brink of bankruptcy in recent years …. That’s simply not true, and Evans knows it. ….”
Bombastically wrong. And I knew it then.
In a typical progressive thought process, the best that the CN&R could muster was to suggest that we the taxpayers should throw more money into the money fire. Wrong again CN&R. It is time for a reasonable level of fiscal management.
The story today is just beginning of a long and complex tale of woe. Much more will be coming. I just hope that folks will follow the details. You should be shocked and vow to follow local government in the future to a greater degree.
Mark, thanks for bringing us this information. This is terrible news, but it demonstrates why citizens better pay attention to their local government. I’m hoping that many people will turn out at the next council meeting, I only wish that item 4.6 was moved up on the agenda to the first item of business…it’s certainly our number one concern. Beats the debate over paper or plastic all to heck!
One of the many criticisms made about conservatives is that “all they care about is money”. This demonstrates that we should all be concerned with money. Yet progressives never seem to think about money or concern themselves with the consequences of mismanagement and overspending of tax money. Careful management of tax money is the most important responsibility our city leaders have and if they are unable or unwilling to assume this fiduciary responsibility they should not be returned to their position.
When these ol’ “conservatives” start throwing the millions around, the first thing you do is get out the calculator. $4.1 million divided by 45,000 taxpayers comes to $91 a year. $91 a year, fer the cops and the fire fighters, and the Bidwell park life guards.
People, yer gettin’ a deal.
No it’s more like when 4.1 million a year of money you DO NOT HAVE is spent by 5 Liberals, then you need to do the math. 2 less Liberals on the Council saves Chico 4.1 million from wasted spending.
But, if it’s been going on for five years and we’ve blown through 20 million thats more like $450 per taxpayer. I still like Harold’s idea best, just get rid of a couple of libs on council so we can have a conservative majority. Think of the money we would save and the jobs we would be protecting!
Thank you, Mark, for your tireless efforts on behalf of the taxpayer.
Perhaps it’s time to hold those in charge PERSONALLY responsible for their votes for fiscal fiascoes.
Those voting in favor of $pending that results in things like – oh, let’s say like the Stockton bankruptcy – should perhaps be required to reimburse the taxpayer out of their OWN funds. Those voting against not be charged.
If those in charge of $pending the taxpayer dollar were on the hook for bad decisions – other than perhaps losing an election down the road – one would hope they wouldn’t be quite so free with their largesse.
That’s right. You just keep on .. alternately yowling and sniveling in complete and total denial of the facts.
Fact one: You ain’t never, ever getting public services for free.
Fact two: Ninety dollars a year, per household, on the off chance that your house might catch fire … or your kid get pummeled unconscious at One-Mile and need help … this is a deal.
It’s not just $90, it’s $90 more on top of what we’re already paying. It’s $90 more each year and this goes on forever! And it’s also higher fees, and higher permit costs, and special bond assessments.
It’s paying more – getting less.
The budget was once only about 40% for government salaries, then it grew slowly to 70%, and suddenly it’s at 85%!!! Only 15% left to fill the pot holes and buy fire trucks?
Where does it stop Libby? And then there will be those future costs as government keeps growing and demanding more of our taxes, $90 won’t be enough and you know it. Soon it will be $190…where does it end Libby? Please tell us, you’ve got all the answers.
What? … already paying? Sales tax? Property tax? What, exactly?
“The budget was once only about 40% for government salaries, then it grew slowly to 70%, and suddenly it’s at 85%!!! Only 15% left to fill the pot holes and buy fire trucks?”
40% of what? 85% of what? You throw these numbers around like we’re suppose to cower and cringe, but we’re not going to … until you explicitly explain yourselves.
And then … you admit that the $90 is it.
What? You’ve got nothing better to do than conjure boogies where there are none? You and Sorenson are going to have to do better, if you want to conquer me and my little calculator.