$2.6 M Budget Deficit Seen As Adelanto Bankruptcy Herald

(June 26)  ADELANTO— Bankruptcy still looms as a prospect for the city of Adelanto as the city council this week ratified a 2014-15 general fund budget replete with a $2.61 million deficit.
According to city manager Jim Hart, the city anticipates taking in $10,564,589 in revenues to infuse the general fund over the next 12 months and anticipates expenditures of $13,206,499 out of the general fund in the same span.
Last year at this time, Adelanto declared a fiscal emergency just as fiscal year 2013-14 was about to begin. Total revenues though all of the city’s funds – the general fund, special revenue funds, enterprise funds, non-profit funds and agency and trust funds will come to $30,196,210 in 2014-15. Spending from all of those funds is anticipated to be $35,003,531, a deficit of more than $4.8 million.
City officials, including Hart and members of the city council, offered a dire warning that having the city file for bankruptcy protection is in the cards if a majority of the city’s residents do not vote in favor of a utility tax measure the city has placed on the ballot in the upcoming November election.
Hart said he has pared spending on programs to the bone and has nowhere else to realistically cut. The city’s largest general fund expense is its contract with the sheriff’s department for law enforcement, one which runs $4,970,997 annually. The next largest budget expenditure is the other prong of the city’s public safety function, the county fire department, which will eat up $2,467,369 in fiscal 2015-15.
The city’s payroll for non-safety employees is $2.5 million.
Hart said the city is woefully behind most other cities in the county in terms of tax revenue. The city anticipates $4.6 million in tax revenues in 2014-15, which is approximately 35 percent of its budget. The average tax revenue percentage for other cities in the county is 67 percent.
Two years ago, San Bernardino, the county seat and the largest city in San Bernardino County, filed for Chapter 9 bankruptcy protection.
Adelanto’s leaders are casting about for ways to keep the city of 27,139 afloat financially and avoid becoming the second city in the county to declare bankruptcy.
City officials are relentlessly plugging  the utility tax, one that as currently proposed would entail a surcharge of 5.95 percent to 7.95 percent on residential and business utility bills. If passed, the tax would entail an estimated $20 per month per household increase on utility bills.
A phone poll of a cross section of city residents carried out several months ago indicated that the chances of the tax’s passage were marginal, at best. The perception that city employees are living high on the hog has made many city residents reluctant to impose upon themselves higher utility costs to benefit the city. A recurrent theme in residents’ comments is resentment at Hart’s $280,000 compensation package, one some consider excessive for a manager of a city of less than 30,000 population.
In May, the city put itself into position to seamlessly make the bankruptcy filing if push comes to shove when it hired Orange-based Urban Futures, Inc. as a consultant to deal with its burgeoning fiscal crisis.
Urban Futures guided the city of Stockton with regard to its bankruptcy filing.  Though many read the arrangement with Urban Futures as a confirmation the city will pursue a Chapter 9 filing, city officials sought to suggest that the retention of Urban Futures, at an initial cost of $30,000, was a ploy to avoid bankruptcy.

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