1994 ADJ MIN DEC 19 - Laserfiche WebLink

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Mayor Fulp explained to Council and the public that the reality of the City's fiscal condition is that the City is spending $500,000 more than is taken in per month. He reminded everyone that it is a misuse of RDA monies to make payroll. He recalled that City Council directed the City Manager to develop a plan to reduce the monthly operating expenses by said amount. He cautioned that Council cannot dwell on what happened 10 years ago. Presently, the City has a financial crises and City Council has to deal with current woes. If not, the City will go into a receivership. Recent audit has found the City to be on the verge of bankruptcy. Council must take steps to save the City. Councilmember Hutton agreed that Council must plan for the City to have a sound financial plan; however, he continued to request the 10 -year analysis to see what is still available. He stated that he had two analyses for the same period which bore conflicting figures. City Manager Martinez stated he received direction to close the budget gap which is the difference between the history of expenditures and revenue. The difference is $4 million with the prior year's deficit at $6.7 million. Discussion ensued regarding budget time -frame, the budget now spent and the revenues anticipated. It was reported that expenditures are on target with the bulk of revenue monies expected to be received in December and January. While there are projections as to expenditures, projections for revenue cannot be done as revenue has not come in. Councilmember Sandoval inquired if the 1994-95 budget is on target. Finance Director Chamberlain stated the budget is current but the City has major problems as the budget depends on one-time revenues. Councilmember Sanders inquired about contingencies developed to perceive the City's fiscal condition. Councilmember Sandoval stated there was serious work being conducted to address the $11 million deficit, i.e., (1) projected cuts through taxes and earnings the City has financed and (2) small revenue enhancements. He expressed the fact that he did not find involved increases on revenues and taxes palatable. Councilmember Hutton inquired about the $4 million expected from the Rancho Mediterrania buy-out. Director Chamberlain responded that $2.5 went to the fiscal agent not to the City coffers. Economic Development Director Gabriel informed that he had worked with bond counsel and it was their opinion to pay back $2 million on the note. Councilmember Hutton asked if this action created equity for the City and Director Gabriel indicated it did. He related that he was pursuing refinancing for the cash value. Mayor Fulp asked how long could payroll be made in the foreseeable future. Director Chamberlain estimated 3 to 4 months with the current cash balance. City Treasurer Williams stated there were $8.3 million in the City coffers which could be spent in the next 6 months. Discussion continued on how the deficit was determined, anticipated revenue and the expenditure timetable. As requested, City Manager Martinez called upon Finance Director .-, Chamberlain and Assistant to the City Manager Parrish to present the 2 0EC 19 1994