Hawthorne stops bleeding in city finances, plugs $6.2M budget deficit

by Shelton on September 18th, 2015

filed under Finances

Hawthorne city officials have been forced to impose deep cuts to close a $6.2 million budget deficit they acknowledge grew out of poor management of the city#x2019;s finances.

A laundry list of cuts #x2014; among them 12 days of furloughs for all employees, including police officers #x2014; was necessary to plug the deficit, which equalled nearly 10 percent of the city#x2019;s $64.7 million operating budget for the 2015-16 fiscal year.

With the budget year beginning July 1, the spending plan adopted Thursday night was more than two months late and reflected cuts even deeper than those made during the recession.

#x201c;We are in the unhappy position of facing a financial crisis that requires that we take drastic action to balance the budget,#x201d; Councilwoman Olivia Valentine said before the council voted unanimously on the plan. #x201c;We regret the necessity to take this action.#x201d;

All employee holiday, sick and vacation pay was frozen, along with City Council funds set aside to sponsor festivals and other events. The Police Department contributed $200,000 to help the general fund from monies seized during criminal investigations, while all other city departments found cost savings in employee training, supplies, contract services and staffing reductions.

About $800,000 in new spending approved last year at the behest of former City Manager Michael Goodson and Mayor Chris Brown was reversed, effectively removing promotions and new positions added after Brown took office in late 2013.

On Thursday, Brown and Councilwoman Angie English, who supported last year#x2019;s spending increases despite pleas from Councilmen Alex Vargas and Nilo Michelin to reduce costs because the city has faced a debilitating structural deficit for more than a decade, did not offer an apology. Instead, they laid blame on previous city leaders and increasing pension costs.

#x201c;We had about $700,000 in new raises and hires (last year), but would it have changed where we are today#x201d; if that hadn#x2019;t been done? Brown asked. #x201c;So instead of $6.2 million, we#x2019;d be at $5.5 million?#x201d;

Finance Director Rickey Manbahal responded: #x201c;It would have shortened the deficit by $700,000.#x201d;

Valentine also supported last year#x2019;s increased spending but has since worked to reverse those decisions.

#x201c;The city manager and I went through some serious discussions, and we#x2019;ve turned over every rock,#x201d; Manbahal said. #x201c;It was not an easy budget to put together, and by no means are we excited about it.#x201d;