Plan outlines stark future for Grand Terrace
"These are not part of the cutbacks," joked Councilman Bernardo Sandoval.
But it might get to that point if changes aren't made soon, according to consultant Jim Simon of Santa Ana-based Rosenow Spevacek Group Inc.
The city is facing a projected deficit of about $550,000, about 10 percent of the General Fund, for the fiscal year beginning July 1. That figure is expected to balloon to $1 million for 2015-16, if no changes are made.
"You're not at a point where this is insurmountable," Simon said, "but you are at a point that a lot of cities have been at a crossroads and made the wrong decision."
If the city doesn't enact some combination of service cuts and increased taxes, he said, the city will run out of money by 2015.
Simon recommended rethinking the budget by dividing it into three priority levels: legally required functions; services the city considers essential, such as business development; and optional services.
"It's not about deciding what line items are we going to delete but what's most important, next and next," he said.
Projections of rising costs for services such as law enforcement - 70percent of the city's budget - show the city will need to raise more money if it wants to keep service levels above what unincorporated communities receive from the county.
It's something people have said about the bedroom community since it incorporated.
"It's true what was said back in 1978: You really have no other sources of revenue," Simon said. "The city's gotten by for years doing things - pulling money from reserves, relying on redevelopment - that quite frankly are not sustainable."
Grand Terrace, which has very few businesses, draws heavily from its Redevelopment Agency to fund many basic functions - including part of the salary of 13 of the city's 20 full-time employees.
But the agency expires in 2034, and Gov. Jerry Brown has proposed eliminating all redevelopment agencies this year.
"Redevelopment loss would be catastrophic," Simon said.
But the city does have bright spots, including a small employee roster that saves it from the ballooning pension costs crippling many other cities.
And it still has until July 1 to incorporate Simon's suggestions into a working budget.
City Council members, who had warned about the city's financial situation before hiring a consultant for $25,000, said they want residents to tell them which services they consider essential.
"I speak for myself, and I think I speak for the rest of the council, when I say I want to hear from you," said Councilwoman LeeAnn Garcia. "If you (study) the annals of (Grand Terrace) history, the founding mothers and fathers, the things they did are amazing. Definitely, difficult decisions have to be made, but we can do it."
Sandoval agreed.
"It's a critical moment for our city," he said. "The solutions to these problems do not lay in the City Council, they do not lay in staff and they don't lay in residents. The solution is for us to come together in a way that's never been done before."
ryan.hagen@inlandnewspapers.com,
909-386-3916
Grand Terrace authorizes $29 million in bonds
The bonds can't be used to cover the city's General Fund deficit, projected at about $550,000 - 10 percent of that fund - and also projected to increase in the coming years if no changes are made.
But as consultant Jim Simon of the Santa Ana-based Rosenow Spevacek Group told council members on Tuesday evening after they voted unanimously to authorize the bonds, the shortfall can't be met entirely by cutting expenses in the bedroom community.
The money from this bond could attract businesses to help increase the city's tax base, said Community and Economic Development Director Joyce Powers.
"We're primarily interested in building new infrastructure for the city that would allow us to build new revenue," Powers said.
The money is intended for road widening, storm and street rehabilitation and hill stabilization, according to Powers' report.
She also listed infrastructure projects in the southwest area of the city, east of the 215 Freeway between De Berry Street and Pico Street.
Public Works Director Richard Shields filled in some details, such as a plan to expand Michigan Avenue so it can function as a secondary highway and handle increased traffic from the opening of Grand Terrace High School, expected in August 2012.
But resident Sylvia Robles said she wasn't sure how such "nebulous" projects would help raise money.
"The problem I have with (redevelopment agencies) is the lack of transparency that's inherent to it," Robles said. "While they were able to divulge more about Michigan Avenue - its (widening) seems something very valuable to the entire community - it still seems difficult to justify the balance for what we're getting."
But city staff members said the bonds - expected to result in debt payments of $1.6million to $2million per year from 2011-12 to 2033-34, based on current market conditions - are the only realistic way to perform long-needed work.
"That would be a critical challenge for the city because we'd have to accumulate money in the General Fund," which would take at least 10 years, said City Manager Betsy Adams.
ryan.hagen@inlandnewspapers.com, 909-386-3916
