San Bernardino City Council accepts, files mid-year financial review

In a 5-1 vote, San Bernardino City Council received and filed the mid-year financial review – fiscal year 2018/19 report and authorized the director of finance to amend the FY 2018/19 budget as outlined in the mid-year financial review – fiscal year 2018/19 report.

At the council meeting held on March 6^th, Interim Finance Director Rita Conrad presented the council and city staff with a mid-year financial review.

“In light of the economic environment, the FY 2018/19 Budget was built to maintain existing levels of service, fund mandated obligations, and allocate available ongoing funding on a one-time basis to maintain flexibility to face uncertain fiscal impacts,” said Conrad.

“While we were able to close the projected deficit in the current year, the financial model anticipated a gap of nearly $4.3 million in FY 2019/20 which grew to over $9 million over the next ten years,” continued Conrad.

According to the city council agenda, the emergent gap in necessary resources to address the backlog of deferred maintenance throughout the community is conservatively estimated at $182.2 million.

“To simply preserve the current condition of the city’s infrastructure and not fall further behind, the city needs to invest $9.7 million (conservative estimate) each year. These figures do not include the capital replacement costs or repair and upgrade costs related to City-owned buildings and facilities which are conservatively estimated at $144.2 million,” Conrad said.

The city’s general fund was also discussed in correlation with the bankruptcy budget.

“Bankruptcy costs are covered by the general fund. We’ve been out of bankruptcy for long enough that we need to start planning for those costs,” said Conrad.

“Bankruptcy costs will now be part of the general fund budget. General fund and the general fund reserve are the same dollars. In the past, the city didn’t budget for bankruptcy, which left them pulling money from the reserve. They will budget for it as part of the general fund from here on out, rather than not having enough and having to make a transfer at the end of the year,” said City Manager Andrea Miller.

Councilman Henry Nickel supported the general fund budgeting plan. He stated that the city will be running deficits in the upcoming years and this time gives the city a chance to get a sense of how to best prepare for a rainy day.

“That reserve is something that is there and it’s available for us, but we, through discipline, do not use it, because we are saving it for an emergency. I fear that sometimes people may think…well you got that $30 million why don’t you fill the potholes, trim the trees or hire more police officers? I want people to know that a reserve is not a savings account, it’s for emergencies,” said Councilman Fred Shorett. For more information, visit https://www.ci.san-bernardino.ca.us/.