Plan Presented to La Palma Council Found ‘Unsustainable’

 By Rico Dizon

 The 11-year Sustainable Financial Plan, presented to the La Palma City Council, did not garner favorable support by a majority of the City Council members during its March 5th regular meeting.

City Manager Ellen Volmert came out empty handed in her recommendations that the City Council provided directions for the creation of the FY 2014-15 Budget in concern. No approvals were given to either the General Fund Revenue Policy, the Fund Restructure recommendation or the Fund Reserves Policy recommendations.

It turned out that the City Council were expecting a copious Sustainable Financial Plan to be presented. The general consensus was that the plan presented was lacking in figures, specifics and recommended solutions. The City Manager, on the other hand, told the City Council, “We need your directions before we proceed to a more detailed plan.”  However, the City Council thought it is the other way around.

Results of the presentation ended up with a lot of unflattering remarks from the City Council. Councilman Gerard Goedhart thought, “The financial plan is not in fact sustainable, how can we go forward if we do not have a sustainable budget?” In addition Goedhart asked, “Assumptions must be more realistic unlike for instance, using Tesoros’s sales tax revenues for the operating expenses knowing that the company that replaced BP before has barely started and is still highly volatile.”

Council Member Steve Hwangbo remarked, “Although we welcome parts of your concept which is the result of our prior negotiations, nevertheless, I need a more detailed and thorough financial plan.” He said, I noticed a huge expenditure in the Police Department. In previous meeting, he suggested, “instead of hiring outside consultants to undertake a study on how to make the department lean and mean, I think our police chief is capable of doing the task.”

In the presentation, the General Fund for FY 2014-15 begun with a surplus of $689,061 but ended with a $226,261 deficit after the 11- year projection despite assuming full use of Tesoros’ tax proceeds. The expenditures caught up with the revenues and eventually surpassed the latter in the last five years of the presented plan. Sources specify the city has to cutback, primarily by reducing expenses including the non-replacement of vacating employees and demanding overtime from the current staff. Local residents believe the city needs to find other alternative sources of revenue.

The City Manager and Staff are dealing with the task of delivering the revised Sustainable Financial Plan as requested by the City Council for the next meeting on March 18. Coincidentally, just 10 days shy prior to ending the interim work of Don Pruyn who presented the plan. Pruyn was hired in October last year shortly after the city’s former Finance Director Michael Solorza resigned.

 

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