Desert Hot Springs, Ca.,- Will the city of Desert Hot Springs gain the title and be the poster child of the only city to have declared bankruptcy…twice? As the recent election results are being analyzed (and recounted by a supporter of the ousted Mayor Yvonne Parks who lost her seat by 12 votes), a DHS financial doom report was overshadowed and some say may have been held back from the voters. After the polls were closed, “Parks says she was blindsided by the announcement that without drastic changes the city will run out of general fund cash by March 31. That could mean a path to bankruptcy or even disincorporation.”
In a special interview approximately two weeks before elections, Parks was very upbeat about the financial situation downplaying the problem:
“We’re having some difficulty with our budget. The projected budget is $18 million and projected revenue is $16 million. So we’re behind by about $2 million — maybe a little bit more. We’re looking every month at expenses and revenues so that we can try to keep expenses down. We’ve had a high increase in sales tax year over year, and our assessed valuation for property tax is up. If the trends continue upward, we may have more revenue than we anticipated. But we’ll cut wherever we can. Source: LINK
The outgoing City Manager Rick Daniels, was the first to abandon this leaky ship to a paycheck in Needles placing him closer to his own private attorney (who is Needles city attorney) and far away from the DHS financial disaster looming.
Several investigative reports reported on the deficit spending by Daniels and approved/supported by Mayor Parks fell on deaf ears. Parks always had her 3 votes locked in to rubber stamp her decisions. Here is an excerpt from Dean Gray’s report dated November 27, 2012:
“City budget papers presented by Beaman were distributed with one line item clearly identifying a budget deficit of $3,223,000. City manager Rick Daniels down-played the issue saying deficit spending was “temporary” as certain money promised from the power plant and a sales tax appeal “would take care of that.”
That was counted by a comment from Planning Commissioner John Girardi, the former director of finance for the city of Coachella explaining the rule of city financing is not to bank on receiving promised but not guaranteed funds.
Bottom line is the city this year (2012) is exhausting $5 million in reserves by over fifty percent and the official story from city hall is we have nothing to worry about. Importantly, the City Manager Rick Daniels is replenishing the reserve dip with shaky one-time revenue and doing nothing about solving the problem. This simply leaves the city vulnerable again the following year unless things change.”
November 2013-Now that Yvonne Parks has been ousted from her seat as Mayor, what steps are available to the DHS Council to change the fiscal trajectory towards bankruptcy, a second time?
The Desert Sun offers this editorial: (Make the Difficult Calls to keep Desert Hot Springs on the Map, Nov 14th) “The Desert Sun endorsed Parks — somewhat reluctantly, believing she was the best of three options — but we find it hard to believe she didn’t see this coming. She serves on the city finance committee and, as mayor, should be as familiar with budget projections as any elected official.
Interim City Manager Bob Adams says he warned the council weeks ago that the city faced significant financial problems in the coming fiscal year. But he wanted to wait until he had specific numbers before sounding the alarm. He also warned the city he would be out of town in the weeks leading up to the election. Nevertheless, it does seem suspicious to drop this bombshell just as the polls were about to close on Election Day.It also makes us wonder about the real motivation behind former City Manager Rick Daniels bolting to Needles.” Read the rest of their Editorial at this LINK
Cactus Thorns will post the results of the DHS recount and future plans to avert bankruptcy as we receive the information.
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