HomeMy WebLinkAboutStaff Report 4.A - Late Document 2 05/20/2013 BrYantR. Moynihan
-P. O: Box 2210
Petaluma,'CA.94953-2210
May 17;2013 414)/ ®10/y
Petaluma City Council
City of Petaluma
11 English St.
Petaluma, CA 94952
RE: Budget Workshop on Monday;May 13, 2013
Dear City Council:
I am sorry I;was notable to attend Mondays meeting, I was in the Midwest attending my daughters college graduation. I
was disappointed in the staff presentation. The misinfomiation and failure to highlight the fiscal problems facing the city of
Petaluma was very misleading to the general public..
The Mayor suggested;that.the city budget was an audited`document. The only document that:.is audited is the
Comprehensive Annual Financial Report(CAFR). The last CAFR was for the 2012.fiscal year And on pages 120-121 of
the FY2012 CAFR it indicates that the Internal Service funds were depleted by$4.1 Million(from$9,402;694 to
$5,292,632) The City Manager at both?the mid-year budget review and during his,introductory remarks during this
meeting;pointed out that this was a real=problem And he indicated during the mid-year review that while the city can
continue to,draw down the internal service funds this fiscal year we will need a new revenue source next fiscal year There
were no new revenue sources offered<to:offsetthe$4.1 Million being spentfrom.the.intemat:service funds.
When,the Finance Director tried to answer the budget questions.I posed,.he said1hat this year-end Internal Service Fund
balance will be$7.4 Million. How do you reconcile an increase of over$2 Million dollars in,internal service fund balances
while.the cihr has adopted a policy of,drawing down internal,service funds? It is in all likelihood less than$2 million:
Either the Finance Director misrepresented the current fund balance or staff is using special revenue funds and enterprise
funds to cover the shortfall. Based on,the`2012 audited CAFR, one couid reasonably estimate that the internal service
funds will be completely depleted.by the'second'quarter of FY2014.
The City,Finances Director misquoted my letter t?questioned-why the City is illegally-transferring $30;000 of Asset Seizure
funds into the General Fund. The Finance Director suggested, correctly;that asset:seizure funds can be used to
purchase;police vehicles. Wheethe City Council.,adopts this budget theywilhbeblessing,staffs'decision to
misappropriate asset seizure funds. This is just like this years adopted budget where$90,000 was being transferred from
the Wastewater'Enterprise:fund into the-General Fund.
The councircontinues to notaddress the unfundediPERS'.Pension Liabilities. Based on the June 30„2011 PERS
Statement, we all know that the City needs to'contribute roughlyr$11.5 Million to PERS to avoid the increase of unfunded
PERS Pension liabilities. When the City Management-suggests that the City Council adopt a budget which only
contributes $6.1 Million, the City Councilishould recognize,and admit that there will be over$5 million in unfunded PERS
pension liabilities this fiscal year. If the City Council adopts:the proposed-budget you will dig the hole deeper.
The City Finance'Director suggested thatthe$500;000 budgeted for street maintenance made street maintenance
budget priority. Th&Citizens advisory committee on the streets..reported'some ten years ago that it would take$8 million
per year to maintain the streets with-the thenicurrent Pavement Management Index (PMI). This council has always
underfunded street maintenance and does;not make'it a budgetprierity.
By extending the labor agreements last fall and not making the needed cuts in compensation spending, this city council is
on a road to bankruptcy: Dithering is not leadership. This City Council is doing aihiorrible'job.
Sincerely,
L.
Bryant R. Moy Than