Budget Warning Signs in Grand Terrace & Giggles

This week's Grand Terrace City Council Meeting was poorly attended by the time the City Council Members were winding up their review of the quarterly report on the Finances of the City.

The City Council finally admitted a few things on the record that should be noted. First of all the Management Summary of the Financials is not written in such a way they can grasp the financial reality of the city.

The City operates on the accrual method of accounting and quite briefly that means when the City Council Approves a Contract or expenditure the money is accounted for as being spent even if the check has not been written.

In addition the City's Revenue Sources are not linked to its expenditure cycle so there appears to be a Cash Flow Situation that the current reporting method does not clarify to the City Council or the Public.

What is known is that the City Council at the guidance of Schwab/Berry dipped into the "Reserve Fund" to the tune of nearly 1,000,000 last year. Part of that was what the City Council agreed to pay off the Schwab for leaving. Where for example he could have been terminated with cause and not cost the City another dime. Berry should have been released with cause also. However the City Council persistent in finding the EASY and Most Expensive resolution chose to spend money on these two.

In addition there is the cost of the law suits that were a direct result of the stubborn arrogance of both Schwab and Berry that was supported by the City Council by not listening to Citizens Concerns about City Supported Development Projects. This cost is a result of their actions not those that were forced to file a case against the City.

Citizens should all look at the recorded version not the minutes of the city council meeting. Councilman Walt Stanckiewitz and Jim Miller were bringing to the point that the current spending plan is 200,000.00 above the projected income, and that the expenses accrued to date exceed revenue and have been funded by the "Reserve Fund". Their underlying concern is that fact that Revenue Projections are expected to be less than budgeted. Property values and sales tax receipts continue to drop or be taken by the state and county. Jim Miller said this City is Bleeding Cash and it has to stop. The Revenue Projections are not sufficiently detailed for the City Council Members to have any assurance that they will be sufficient to cover the city's accrued expences and those for the remainder of the financial year.

Council Member Bea Cortes giggled repeatedly and stated she did not understand the financial reports in front of her. The Mayor and Lee Ann Garcia were also giggling about their own incompetence at reading and comprehending the financial reports.

How did city get to this state? Well, in great part it is a result of the City Council being the puppet of the Scwhab/Berry team for all these years. The blanket approval of all staff recommendations including their self serving pay raises and house purchase and cars.

The City Council's decision on the price paid for a replacement City Manager shows a continued spending spree. There are many city employees who work for just above minimum wage, no car allowance or phone paid by the city. The inflated cost of the City Manager's Contract should have been addressed prior to the new hire negotiations being done.

Walt and Jim are right. No business operates without a cash flow report and a cash flow projection. This is something this blog and many citizens have been asking for in the past. We were told... you just don't understand financial reports and how finance is done.

Now it is clear that Cortes, Ferrie and Garcia also don't understand either. Walt and Jim are relatively new council members who have seen the light... Insufficient Data, or Data compiled in a way that it covers up, or confuses the public and council is leading this city to the poor house.

The Mayor's concern was that we don't find that GT is going to suffer the same revaluations that Colton has. Well Mayor, if you add up all the debt of the Redevelopment Agency and the City and compare that with the "Reserve Fund" and Expected Revenue (Discounted for the slow economy and state actions), you will find we are in the same financial situation as Colton.

It is time that the City Council Members stop being paid auto, medical, and meeting expenses and stipends and insurance. The part time City Council Members should not have any more benefits than the lowest paid part time employee has.

It is time that the City Council focus on bare necessities such as water, trash, sewer, police and road repair. All association fees and other perks need to be cut.

The City Council must stop thinking there are hopes of increased sales tax revenue when the Citizens are not earning more to spend. If anything spending will decrease and sales tax revenue will decrease. Just as property values have decreased so will the property tax revenue. These adjustments to revenue expected will blast a bigger hole in the "Reserve Fund". The City has done nothing to increase the Income of the Citizens in Grand Terrace, (other than a few within city management).

It is time for Garcia, Cortes and Ferre to stop giggling, or be removed from the council. The City has been damaged by them enough. Jim Miller is not running again as he has been damaged and had enough of the City Council that feed him to the sharks Schwab/Berry.

Reassurances of the Finance Director hired by Schwab/Berry team mean zero to the public. He failed the City Council in the past and did not report problems he should have. There is no reason for there to be trust in his projections or numbers.

The new City Manager has a plate full. Lets wait and see if she will step up and take a pay cut or will lay off minimum wage employees, part time employees, or child care workers, in order to find funds to support her income. Lets see is she has the strength to hold contractors to their contracts and takes an aggressive stance in getting the best services for the lowest price for the City and Citizens.

The new City Manager has quite a job to do if Grand Terrace is going to get past the legacy left behind by Schwab/Berry/Cortes/Ferre/Garcia machine.

The Citizens should be concerned very concerned. Cortes/Ferre/Garcia should know it is no laughing matter that after all these years on the City Council they don't understand financial reports they have been approving because the Schwab/Berry said that they should approve them. Now is an interesting time to begin to ask questions. Ya THINK?