Rohnert Park Considers Declaring Fiscal Emergency

Rohnert Park City Manager Gabe Gonzalez said the city should consider declaring a fiscal emergency in light of a $1.4 million budget shortfall, partly caused by rising health care and pension costs. 

Gonzalez made the announcement at Tuesday's council meeting as City Council discussed the budget for the 2013-14 fiscal year.

"We have a structural deficit and our expenditures continue to exceed our revenue," Gonzalez said. "Declaring a fiscal emergency helps us stay on track."

This is the sixth year in a row Rohnert Park has been unable to balance its budget, forcing it to dip into its reserve fund. The city also has more than $22 million in unfunded liabilities for city vehicles, infrastructure and employee and retiree medical benefits.

City Hall has already laid off at least three dozen employees and scaled back services, including road improvements, parks and recreation to the consternation of residents. 

But because of existing contracts, the city has had little choice but to keep on paying the benefits to current and former employees.

Gonzalez's proposal, which has to be approved by council, may be aimed at giving the city the chance to void or alter union contracts, although Gonzalez rejected the notion when asked about it by Patch.

Under California law, municipalities that declare a fiscal emergency can amend labor contracts, but only if several criteria are met, including if a city can prove in court that it’s experiencing a true emergency that prevents government from carrying out day-to-day functions.

It's an option being invoked by more and more cities-- Atwater, La Mirada, Fairfield and Culver City, to name just a couple-- in light of an economic crisis that is longer and more profound than many ever anticipated.

The idea of a fiscal emergency is to avoid going into bankruptcy, which ruins a city’s credit rating, not say anything about resident and employee morale. 

“Handled properly, a declaration of fiscal emergency can be a final opportunity to correct course if the evidence suggests the current course will decimate services,” said Jonathan Holtzman, a partner at Renne Sloan Holtzman & Sakai, a public law group based in San Francisco, in a 2011 article.

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“No one likes to hear that promises cannot be fulfilled,” wrote Holtzman, referring to public employee obligations. “But promises to employees and retirees are not the only promises a government makes; it also makes promises to the residents ― promises that induce them to come to a particular city or county. The failure to live up to the latter promises has had a devastating effect on the public’s view of government and contributes significantly to the death spiral in which we find ourselves.”

Calls to city council members Wednesday afternoon were not immediately returned.

What do you think of the city manager’s suggestion that Rohnert Park declare a fiscal emergency? Would you like to see city employee contracts renegotiated?