100 Day Report Offers Recommendations To Improve Modesto’s Financial Health
Modesto may not be financially prepared to weather a future economic recession, but according to the recently published 100 Day Report, there are many actions that the Modesto City Council can take to both increase the city’s general fund and establish the resources to hire additional police officers.
The report was prepared by the 100 Day Committee, a group including the mayor, two city council members, and ten local citizens. The committee was tasked with studying Modesto’s financial picture and finding the funds to add more Modesto police officers and improve the city’s long term financial stability, and was asked to focus on the city’s general fund budget, where the council has the most discretion in setting priorities and from which the council funds public safety.
“What we discovered is truly alarming: In each year after fiscal year 2016-17, City expenses will exceed City revenues, according to Modesto’s own forecasts for its general fund, which pays to operate the City,” committee chair Charles L. Bryant wrote in a letter prefacing the report.
“These forecasts are based on fairly optimistic assumptions about money coming into the City,” Bryant’s letter continued. “They don’t take into account more realistic forecasts, including those weighing a recession, which will come again, and the increasing burden of mandatory retirement contributions (to CalPERS) or other financial difficulties.”
In the report, the committee concluded “…unless Modesto sheds a ‘business as usual’ approach and acts soon on multiple fronts, it is possible the City general fund will struggle to supply even the most vital services to its citizens within five to ten years.”
The report identified more than 35 areas that could result in cost savings or revenue enhancement, with recommendations that included:
- Renegotiating banking fees and costs (with a potential of saving $360,000 a year)
- Consolidating duplicative city and county administration services such as mail, purchasing and human resources
- Collecting all franchise fees from businesses using city assets within city limits (which could raise $1 million or more each year)
- Analyzing and considering annexation of a portion of North McHenry Avenue (which could raise $500,000 to $1 million or more in sales and property each year)
“The report contains some hot button issues that may concern some residents and threaten various projects,” Bryant added.
Potentially controversial recommendations included:
- Protect community treasures from long-term budget uncertainties by donating city assets like McHenry Mansion and McHenry museum (operated at a combined loss of $187,000 a year) to nonprofit organizations.
- Sell or renegotiate the contracts of one or more of the city’s three public golf courses (which are projected to lose $696,000 in fiscal year 2016-17)
- Negotiate with DoubleTree hotel to transfer management and operation of Modesto Centre Plaza (budgeted to lose $514,000 in fiscal year 2016-17) or consider the sale or closure of the venue.
- Renegotiate the Modesto Nuts contract for John Thurman Field (budgeted to lose $248,000 in fiscal year 2016-17)
- Consider more profitable uses for the Modesto City-County Airport (which lost $284,000 in fiscal year 2015-16 and is projected to lose another $77,000 in fiscal year 2016-17)
“The 100 Day Report is just a start and the City Council has to approve most all of the major changes,” Bryant said. “Ultimately these recommendations will give Modesto more police, safer streets, and a fiscally sound city.”
“I encourage everyone to read the report and send their comments, ideas, and solutions to City Hall and council members,” said committee member Patricia Gillum, a CPA and Vice Chair of Internal Operations for the Modesto Chamber of Commerce. “It’s important to stay engaged in the process of making our city slogan—water, wealth, contentment, health—a reality for us all.”
To view the 100 Day Report online, and select “Final Report”.
By Jacqui D. Sinarle