Only Craig shultz from the Press Enterprise is still willing to write fluff pieces for the City of Beaumont
Bell, Stockton, San Bernardino. And Beaumont
An inglorious list of California cities tainted by the stain of financial issues or bankruptcy.
As the first three have worked out many of their issues, it is now Beaumont’s turn to take steps to fix its budget in the wake of a scandal that saw seven former city officials arrested on felony charges in a sweeping corruption probe.
But it won’t be easy.
“This has been going on a long time, it’s going to take awhile to recover from this,” consultant Michael Busch told the City Council on Thursday, Aug. 11, during a workshop with members of the city’s Economic Development and Standing Finance committees.
The budget deficit had reached $8 million before the city started working to fix the hole. Beaumont was surviving by borrowing money from funds not meant for daily operations and not saving money for emergencies, said Busch, CEO of Urban Futures, which was hired to delve into the city’s books.
The city has since cut the deficit to $7.5 million. But according to numbers from the city, Beaumont’s reserves could be under $200,000 by the end of the 2016-2017 fiscal year.
Busch said the depths of Beaumont’s financial issues may have been deeper than anyone expected.
“This is worse than Stockton, considering your general fund is only $28 (million), $29 million,” Busch said.
This is on top of the money the city may owe for failing to pay Transportation Uniform Mitigation Fees for years. The city may be on the hook for nearly $60 million after losing a lawsuit over the issue with the Western Riverside Council of Governments.
Stockton, a city of 300,000, is the largest city in California to file for bankruptcy, which it did in 2012. Busch said a lot of issues that faced Stockton and San Bernardino, which filed for bankruptcy in 2012, are the same ones faced by Beaumont – and lot of the solutions are similar, too.
One possibility to fix the budget would be to ask voters to agree to increase taxes, something other Inland cities are doing for everything from enhancing operations to increasing public safety.
But Beaumont leaders agree there’s no way residents will agree to pay more taxes until they have confidence in the city government, something lacking amid the scandal.
“Going out (for a tax) right now would be disastrous,” said Bob Deis, a former city manager of Stockton and consultant with Busch.
City Treasurer Nancy Carroll said officials must explore every revenue option before asking residents for more money, a concept that Deis echoed.
“You don’t go to the tax arena until you can tell the community you’ve tried everything,” he said.
And that could take time. Busch said it could be eight years before the city is financially straight.
“We started to look at opportunities to stop the bleeding and look forward to the city living within its means,” he said.
Deis said none of the solutions – ranging from tax increases to higher fees and possible outsourcing of some city work – will be easy.
“Ninety-five percent of this stuff is going to be controversial in some aspect,” he said.
Mayor Mike Lara said it was good to get positive feedback about how to get the city back on track.
“It was really encouraging to hear from the citizens on these committees,” he said. “Trust is a big issue for this community. We’ve got to develop that trust. I don’t think it’s insurmountable.”