FINANCIAL MESS Auditors offer ideas for cuts
The commission that will develop a plan for fiscal recovery will meet Wednesday.
By MARALINE KUBIK
VINDICATOR STAFF WRITER
CAMPBELL -- The financial news for this city is grim.
According to state auditors, Campbell is short $1.2 million in revenue, excluding utilities. Almost $819,000 of that is for outstanding bills and leases. Some $360,800 is for overexpenditures in the general fund -- salaries and benefits for city employees.
Nita R. Hendryx, assistant chief project manager for the state auditor's Northeast Region, said the city hasn't met its obligations to the retirement funds for police and fire department personnel or to the Public Employees Retirement System.
"The city hasn't paid into either pension fund since last July, so you're a year behind," she told members of city council during a special meeting Thursday evening to discuss the auditors' findings.
"The bad news is that they [pension funds] really hammer you with penalties. Interest and penalties are going to cripple you," she continued.
Hendryx will sit on the state fiscal oversight commission that will develop Campbell's recovery plan.
Another problem auditors discovered is that the percentage of revenue used to pay for safety services is way out of line compared with the percentage of revenue other cities allot, said Unice Smith, auditor's office chief project manager.
Another area
"Fire and police are taking up 70 percent of your general fund revenue," Smith said. "It should be around 40 percent. We can't tell you what to do, but you can't continue the way you are. We will not let you grow the deficit," she stated.
"If no changes are made, you're never going to get out of debt," Hendryx said.
"The appropriations for this year's budget are wrong," Hendryx continued. Revenues are down from what was projected, giving the city less money to spend. "That's our first goal: Curtail expenditures so that you don't spend more than what comes in."
Addressing council, she said, "We need help from you to decide where we're going to cut, how we're going to bring more money in."
Among the possibilities the auditors mentioned was hiring Regional Income Tax Agency to collect an estimated $599,000 owed the city. "You just don't have the manpower to get out and collect delinquencies," Smith noted.
She also suggested the city sell any obsolete property.
"Maybe you shouldn't be in the water business," Smith continued. Selling the city's water plant could provide some revenue, as would passage of a term operating levy that would benefit the general fund, she continued.
Another option would be to eliminate the city's fire department and form a joint fire district with neighboring communities, Smith said. "Ultimately, it's up to you to make the cuts," she told council.
What's planned
The commission that will develop what Smith calls a "road map" to fiscal recovery will meet for the first time at 11 a.m. Wednesday. They will have 120 days from that meeting to submit a recovery plan.
"You've done a really good job of getting down to the bare bones," Hendryx commended Mayor Jack Dill and council. But, she said, there are still tough decisions that must be made.
During a special meeting immediately after their session with the auditors, lawmakers moved to a second reading of an ordinance authorizing the board of control to enter into a contract with RITA for collection of city income taxes.
Council also scheduled meetings for 6:45 a.m. Saturday and 9 a.m. Sunday so that the legislation can receive the required three readings and be approved.
kubik@vindy.com