Artesia's Budget Keeps Residents, Council In the Dark

Over the years, Artesia’s budget process has gone through a very puzzling evolution.

Prior to the current City Manager Bill Rawlings, the City’s budget was straight forward and easy to understand. In fact, it actually won awards for those traits! Shortly after Rawlings started, he hired a woman named Tracy Fuller to act as a consultant of sorts, and one of her duties was to assist with the City’s finances. Together, they created a budget that to this day makes both auditors and laymen scratch their heads. Fuller is no longer with the City, but Rawlings is still responsible for creating the budget.

A Balanced Budget in 2020?

 

In June 2020, the City Council passed a budget along with a new contract with the employee union, which was a stark difference from what most other cities were doing. In the middle of the pandemic, most cities were preparing for a huge economic downturn and employee layoffs due to a massive decrease in revenue. Artesia was different. Yes, there was a projection of a massive decrease of revenue, but Artesia had supposedly been putting money into its emergency reserves, reportedly at 116 percent. That percentage meant the City could take in no revenue for a whole year and still operate at the same capacity.

“I remember the day that the City Council passed the budget. A lot of employees were worried that the City would start doing layoffs, like other cities were proposing to do at the time. We were very relieved when they passed that budget,” said Andrew Perry, President of the employee union, AFSCME Local 1520.

But there are some aberrations in this budget. For one, the first year did not take into account salary increases. The total increase in salaries would have been closer to $400,000; but the 2020-2021 budget said the increases were only $159,000.

During the City Council meeting on June 23, 2020, former Councilman Miguel Canales asked Rawlings if he is presenting to the City Council a balanced budget that reflects the increases of the contract with the employees. Rawlings replied, “Yes.”

But, the budget didn’t reflect the contract changes. “He could have responded that it didn’t reflect the changes and that it will be fixed in a future update, but he said yes to the City Council,” said Perry.

Inflating Revenue Projections to Create Balanced Budgets

 

On the other hand, it might also be the case that few of the budgets over the past five years were balanced, or at the very least not accurately projected. For example, in the 2019-2020 budget, the budget said that fees originating from the Planning Department would amount to $400,000. Then in the current budget, the fees were projected at $640,000. However, even with the original estimate it’s unlikely the planning fees ever reached $400,000, or got close to it. 

 

A former but recent Planning Department employee, said that annual fees have never reached anywhere close to that.

“I think what he did was bundle a couple of state and federal grants, and put them under the category ‘Planning Fees’ or ‘Development Fees’. But that’s not an accurate place to list those grants. Those grants are meant for specific reasons, and are restricted in their use,” said the employee.

The reason for this inflated projection is to create the appearance of a balanced budget. “Balanced budgets look great,” said Perry. “Part of Mr. Rawlings’ appeal to those City Councilmembers that support him is this belief that he is able to present to the Council a balanced budget. However, I believe the budget can be used as a tool to keep the Council hoodwinked.”

There’s another caveat. These numbers should be relatively easy to check. Every City is required to be audited every year, and then publish the findings in a document called a Comprehensive Annual Financial Report, or CAFR. “But look at the City’s website,” said Perry. “The City hasn’t published a CAFR since 2017.”

City of Artesia's website, under Finance. Note the lack of Comprehensive Annual Financial Reports.

 

But, it's not just CAFRs. The City Council is supposed to get periodic budget updates throughout the year.

** "The Council received two budget updates since the last budget was adopted," said Tony Simoes, resident, local business owner, and former employee. "Those were not comprehensive, like the updates other cities would get. If you read them, they surmount to 'Hey, we found some money!'  That's great, but what they don't do is show incoming real revenue against the budget's projected revenue. Why isn't the Council demanding to see the real numbers, and more importantly why aren't the real numbers available to the public?"

City of Glendale's agenda has periodic comprehensive updates that relates to and adjusts the budget. Look at Item 8B and compare to Artesia's "Budget Update".

Perry continued, ”I do know the City has had audits over the past few years, but I haven’t a clue why the City would not publish the findings publicly. It would be interesting to find out why. Was there some kind of embarrassing aberration?”

“Being the Union President brings a different perspective, because I get to hear from former employees, and even from employees who are not represented by the union. I hear the tales from the mouths of former employees and even managers about why they left the City,” said Perry. “I'll leave that for a different story.”

One such employee, speaking on condition of anonymity, said, “Remember, the Council is dependent upon Bill’s (Rawlings) professional advice and recommendations. So, it’s to Bill’s benefit to make his numbers look good. That allows him to buy time, because eventually things will either go back to normal, or government bailouts will be pushed by the state or by the federal government."

On March 12, Mayor Rene Trevino announced to a popular Facebook group called “Artesians for Artesia Now” that the newest stimulus bill under President Joe Biden will provide $3 million in relief to the City of Artesia.

 

 

Mayor Rene Trevino's post about the City receiving $3 million in relief.

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* Wondering why Andrew Perry is mentioned by name and others are choosing to be anonymous?  Union presidents are the representative voice for employees, and are therefore protected by the First Amendment. If you and your fellow employees need a voice, form a union! Contact Andrew at artesialocal1520@gmail.com for questions and get the process started.

** Recent Update: 12:10pm, 3/31/2021