Guest Opinion submitted by Tim Schaefer–
I find it disconcerting that after 20 years of being debt free, the city cavalierly took on debt without doing much in the way of fiscal belt tightening.
It was just recently that the city raised its budget from $32 million per year to over $35 million. Then last November, the council approved a proposal by the city manager to go into debt of up to $12 million. This is happening as we are just three years away from the city being released from its obligation of approximately $5.9 million per year in payments to Sacramento County for Revenue Neutrality.
Related: Citrus Heights will soon get an extra $5-6M per year. How should it be used?
On Nov. 14, the City Council will vote on an official policy to normalize and legitimize ongoing debt. This is a requirement by the state that all cities must comply with SB 1029, a bill that requires municipalities to adopt a debt policy 30 days prior to taking on debt.
So how much more debt are the taxpayers in Citrus Heights going to incur without a vote?
Related: Citrus Heights council to consider approving revised debt policy
It seems that our city struggles with the difference between “want” and “need.” Here is how most people define a want from a need. I “need” to feed my family, I “want” to take my family on vacation. Pretty simple right?
But for our city…
- Needs are items or issues that will put the city into peril or cause harm to its citizens if that need isn’t funded. These are very tough decisions because they require the use of available funds or by incurring debt. i.e., road repairs, maintenance or a result of some sort on disaster. The poorly maintained roads in our city cause damage to vehicles and potentially increased response times for emergency vehicles.
- Wants are budget items that may be of strategic benefit to the city or is a non-essential amenity. Examples would be the purchase of land or offering bonuses to staff. It’s very hard to justify going into debt for a “want.” It now appears that we have a city that wishes to continue the lavish style of the new city hall and are more than willing to sink deeper into debt to do it.
Quoting from The Sentinel’s Nov. 15, 2018, article: “Councilman Slowey said in comments before the vote that future council members could make different decisions about how the line of credit is spent, noting governmental misuse in funding is common across the country. As he (said he’ll) be retiring from the council in two years, he said voters will need to keep council members ‘on their toes’ to make sure that they’re held accountable for how that money is spent.”
This conundrum is all a result of the city spending nearly $23 million dollars on our new city hall. City Manager at the time, Henry Tingle was given the discretion by the council to pay cash for the new city hall or carry debt on the new building. He chose to pay cash. Council Member Jeff Slowey, Mayor Jeannie Bruins and Council Member Steve Miller are the only current members of the city council that made that decision.
I encourage readers to review The Sentinel’s report from last year’s council meeting.
From last year: Citrus Heights City Council approves first-ever $12M line of credit
According to the new policy, it appears that the limit that can be borrowed against the $12 million credit line is $6 million, and roughly $4 million was spent on purchasing the former Sylvan Middle School property. If the city pays off the $6 million debt by 2024, the city will likely pay about $765,000 in interest, but the terms of the loan go out 20 years and could end up costing the city $9 million in interest.
LETTER: City’s $12M ‘paradigm shift’ opens door for more debt, taxes
Mayor Bruins had the right idea in her quote from the Nov. 15 meeting last year, “to get debt-free again as soon as we can.”
I urge the Citrus Heights City Council to actively turn over the former Sylvan Middle School property, retire that debt and put this entire episode in the past. There are much tougher fiscal times ahead for our city. Fix our roads and prepare for 2030.
Tim Schaefer is a 30-year resident of Citrus Heights and has served as president of the Park Oaks Neighborhood Association. He currently serves as a member of the Citrus Heights Planning Commission.
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