Campbell released from fiscal emergency, state’s oversight



After nine years under the state’s oversight, the city has been released from fiscal emergency.

During the final meeting of Campbell’s Financial Planning and Supervision Commission on Wednesday, state Auditor Dave Yost said the city had reached the point where it no longer required interference from the state in its financial affairs, explaining that it had “been a long time” coming.

“A child born the year Campbell was placed in fiscal emergency would be in the third grade today,” Yost said, addressing the audience made up of officials and citizens alike, who had gathered in Campbell City Hall. “I’m proud of you, and wish you the best of luck as you go forward.”

He noted, however, that he doesn’t want his successor in office to return to Campbell for “a repeat performance.”

Though the city’s revenues exceeded its expenditures for 2010, 2011 and 2012, its five-year forecast shows that the city will end with deficits for 2013 through 2017, Yost said, adding that the city has built up enough of a cushion to address the negative balances but needs to exercise caution.

“You’re spending down to your reserves,” Yost said. “You must not fall back into a position where it’s good enough to have [only] a few dollars left at the end of the year.”

Yost also presented Mayor Bill VanSuch with a certificate in recognition of the city’s newfound “fiscal integrity,” and as a tangible measure of the steps — and sacrifices — taken to regain its independence.

VanSuch, too, thanked everyone involved with helping the city emerge from fiscal emergency, and referred to it as a group effort that included hard work from city administrators, members of council and city employees, among others.

“This is what you can accomplish by working together for the betterment of the community,” he said.

The city was placed in fiscal emergency on June 10, 2004, the result of aggregate deficits in seven funds that totaled $598,128, according to the auditor’s office.

Three years later, the state reported on the effectiveness of the city’s financial accounting and reporting system, and identified several areas where it was not in compliance with the state’s requirements.

But since then, the city has addressed those 45 comments from the state by adopting and implementing an up-to-date accounting and reporting system, and has also used a combination of budget cuts and new revenue sources to reduce its deficits.

According to the auditor’s office, those cuts and revenue sources included city council’s waiver of its health insurance coverage, which saved $34,000 annually; the move of fleet and fire insurance to a consortium, which saved $25,000 annually; the institution of a garbage fee and water meter charge, which increased revenue by $100,000 annually; and the institution of delinquent income tax payment programs, which generated $66,000 in 2010 and $51,000 in 2012.

In addition, the city borrowed $747,000 from the state “in a measure of last resort” to eliminate its fiscal-emergency status, according to the auditor’s office. It repaid this money in 2012.

Per the state’s four criteria for release from fiscal emergency, the city also had to correct its fiscal emergency conditions — of which there were six, including default on any debt obligation and payment of all payroll — and meet the major objectives of the financial recovery plan.

Sharon Hanrahan, chairwoman of the city’s Financial Planning and Supervision Commission, reflected upon Campbell’s spending nearly a decade in fiscal emergency, and said the city had a “hard task” in front of it when the state deemed it in need of oversight.

“It’s not been easy, I know,” she said. “But I’m sure that with your continued caring, the city can only thrive.”

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