The Looming Budget Crises in RSM

During the 2012 election in an article at The Patch, Councilwoman Gamble said the following:

“Many cities in California are in financial turmoil – but not RSM!

• Our City has a balanced budget;
• Finished last year with a $1.2 million surplus; and
• Amassed an astonishing $19 million in reserves!”

Those reserves continued to grow to about $25 million, but lack of vision on the part of the voting majority on the council for years, and ignoring the elephant in the room, has left our city facing bankruptcy within 12 years if nothing changes. Let me explain.

The city makes the bulk of their tax revenue from the car dealerships, the city is zoned for four, but only has three with no place to put a fourth. Councilman Beall has often talked about wanting to get up to five in town, but it doesn’t seem possible and no one seems interested, since the Nissan lot turned into an RV center and U-Haul a number of years ago, that space is used up and only generates a small amount of tax revenue for the city. The Nissan dealership has been gone a long time and it seems our city leaders just kept spending as though a dealership would be coming any time now, but the owners have shown no interest in changing anything.

The second largest source of tax revenue is restaurants, so the more you eat in town, the better it is for our financial picture, and RSM residents do eat out a lot, about triple the national average, so that helps. The biggest expense by far is the Police Services Budget – Percent of General Fund Expenditures for the last five years have been:

FY 17/18 52%
FY 16/17 52%
FY 15/16 53.1%
FY 14/15 52.8%
FY 13/14 53.3%

I’m told by a representative at city hall that this will explode to 58% in this next fiscal year and that the reserves are down to $21.7 million now. The city has spent over $6 million on the Chiquita Ridge project with absolutely nothing to show for it other than an asset they can quickly dump at some future date for housing development as a temporary band-aid, but this will actually make things worse because each home is a net loss for the city because of the services that they have to provide which the paltry tax revenue provided from property tax doesn’t cover, the city actually loses money. Our city has rezoned two properties into high density housing already, which has further exacerbated the budget problem.

In the same aforementioned article in the opener, Councilwoman Gamble also says:

“On the Council, developed our beautiful City Hall and Community Center…on time and under budget!”

Maybe it was under budget because it was so poorly constructed and in 2017 required a total overhaul at significant expense. More lack of foresight, but Gamble continued:

“If re-elected, I will continue to work to:

• ensure our City remains fiscally strong;
• conduct City business openly and transparently;”

More empty political promises as our bankruptcy looms and the idea of transparency rings hollow, just look at the previously noted Chiquita Ridge project. Gamble will argue that you can always come to city hall and ask about it, but the city will run press releases and do photo ops on the project when it seemed like a good idea, but they keep quiet about it when it might bring negative news. There was never any announcement after the 2017 survey (the third or fourth) as to the results or what the city is going to do with the property.

Our current Mayor, Mike Vaughn use to be the Vice President and general council for Applied Medical. You might have noticed that Applied Medical has taken up a vast amount of the commercial office space in town, approximately 17 buildings. The problem is that this generates virtually no tax revenue for the city other than employees eating at local restaurants, but most employees are lower paid warehouse work. If Applied Medical left tomorrow, it wouldn’t impact the financial picture for the city, but it would make space for companies that might generate tax revenue.

Our city has had a series of beautification projects in recent years, one of them was to add plants and watering systems in the center median at one or more intersections 4 years ago during the height of the drought. The optics of doing this during a drought were bad enough, but that along with the decorative traffic signals at only two intersections, but no other intersections, is an odd frivolous use of money. Was this a wise use of city funds while the easy to predict budget crises was building?

It would seem our city leaders didn’t really plan things out very well in recent years, maybe there are plans, but the lack of transparency doesn't make it easy to find out. After many years of being in office for most of them, there has been an apparent lack of continued vision and proactive effort. Try bringing any of this up and you will likely get attacked on social media by council members directly, their family members or proxies. It is a repeatable pattern that we’ve seen happening for years whenever someone challenges the existing power structure. You can be a perfectly nice human being and not a particularly good or visionary manager. While this article will likely cause a stir, it is better that people be aware of what is happening so they can take action, either by purchasing more cars in town, running for office themselves, or encouraging more businesses to open in town. Now the property managers for the commercial property are a whole other problem that needs to be addressed somehow, but that is out of the hands of the council.