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Campbell leaders must curb deficit spending
By Jeanne Starmack
CAMPBELL
Campbell needs to resolve a budget crisis for this year, and its survival for the next five years depends largely on 5 mills in new taxes.
The crisis is a combination of a decline in revenues and overspending, one of the city’s financial supervisors in the state auditor’s office reported Monday at a meeting between city officials and a state commission that oversees Campbell’s finances.
The city meets monthly with the commission because it is in fiscal emergency.
Financial supervisor Timothy Littner said most of the drop in revenues is in income taxes at $120,000.
The deficit the city must make up amounts to about $150,000 in the general fund, he said.
There is also overspending in the street fund by $53,000, Littner said.
The general fund and the street fund are “the two big problems,” said Paul Marshall, commission chairman.
The street fund has a deficit right now of $26,000, which city administrator Lew Jackson attributed to bad winter weather.
“I want a plan for how you intend to bring spending in line with your appropriations,” Marshall said. He said at last month’s meeting that Campbell cannot have deficit spending, and that if the current trend continues, the city will run out of money by November. It will have to shut down.
There is a council finance committee meeting set for 6:30 p.m. Wednesday. The committee plans to discuss ways to resolve the crisis.
The oversight commission also reviewed a financial recovery plan for the next five years.
The plan was a joint effort by the mayor, the council and the finance director.
The plan calls for 5 mills of new taxes — 3.4 for the general fund and 1.5 for the street department.
City officials plan to ask voters for the new taxes in November.
It also calls for a gradual transition to a volunteer fire department, with the city’s five paid firefighters keeping their jobs until they retire.
“I’m not sure we can wait that long,” Marshall said. Other aspects of the plan include collecting delinquent income taxes and unpaid parking tickets back to 1985 and enforcing all zoning and inspection ordinances.
Littner said those plans were speculative as to how much revenue they would bring in.
Marshal said a plan to assess a rental fee on landlords of $100 per unit per year has to be passed by council.
Other cuts in the plan include making full-time positions part-time where possible and leasing a catch-basin- and street-sweeping machine instead of paying companies to do the work separately.
Marshall said the plan has to work. “How does it look five years out?” he asked.
Littner said that if the new levy doesn’t pass, the deficit will be $1,203,956 at the end of 2014. If it does, the cash balance will be $935,544.
“This plan hinges on the passage of the levy,” Marshall said. “That’s not uncommon for these plans. Actually, these numbers look better than I figured.”
The plan assumes no more hiring and no increases in pay, he added.
Marshall said that any official or employee who goes outside the city’s recovery plan can be held criminally liable and could be removed from office. He advised council to consult with the city’s law director if that occurs.