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Sunnyside financial picture bleak

City could be broke by late 2009; new city manager outlines response

In 2003 the city of Sunnyside's general fund had a starting balance of about $2 million.

At the rate of current spending versus revenue, the city's general fund will be gone by the end of October 2009 and Sunnyside would end the year $100,000 in the hole.

And that's not a worst case scenario. It's actually pretty realistic, city finance director Jordan Arreola said of the estimates presented last night, Monday, by new city manager Eric Swansen just hours after he took the oath of office.

Swansen's budget observations came at the end of last night's city council meeting. They painted a stark picture in black and white numbers on a wall in the council chambers.

Sunnyside is spending its savings, he said. In a crisis situation the city would only be able to carry on for one month. Swansen said if things continue as they are, the general fund will hit zero by late October 2009.

If things went from bad to worse, the state could step in and run the city books. He also says the sewer fund is a concern

Sunnyside's cupboard is bare, or very near it, and Swansen got a thumb's up from council to proceed with a financial overhaul that will have a lean, and balanced, 2009 budget in front of council by the end of September. Budget amendments are also in the works for 2008 to help stop the fiscal bleeding.

He said the city will have to choose between cuts and reduction in services, raising new revenue or a combination of both.

Sunnyside's financial woes stem, in part, from an unexpected decline in new housing starts in 2007 and a downturn in sales tax revenues. The slowdown came during a year in which the city added six staff positions.

Councilman Bruce Epps later pointed to the $2.5 million taken from reserves to buy the Monson property as one source of the financial problems.

Councilwoman Theresa Hancock said council knew about the financial crunch as early as last fall, about the time former city manager Bob Stockwell left. She felt the situation had been explained to the public at that time.

But not in terms of the city's general fund going broke...and now in just over a year from now.

Council did make cuts last year for the 2008 budget, but Arreola said more budget cuts were recommended by interim city manager Mark Kunkler. She noted, though, that with Stockwell gone council had to shift its focus from the budget troubles to search for a new city manager.

Staff cuts are a certainty for 2009 and Swansen said an early budget decision not only will help the city spend fewer reserves, it will let staff know in advance who's staying and who's going.

It will take a gradual effort, he says, with the immediate focus on retooling the debits and credits for 2008 and presenting a balanced 2009 budget.

Under his direction, council will hold a budget retreat to hash out priorities and consider staff budget proposals.

Two community forums will be held this fall, one to get public input on revenue and one on expenses.

The long-term key, he said, will be generating more employment by attracting more businesses here and that in turn will generate more retail sales. His five-year goal is to see job and business growth improve Sunnyside's financial fortunes. If the five year goal works, he hopes the city will by the end of that time be able to start putting money aside for a rainy day.

For 2009, at least, Sunnyside will face some tough choices for a bare bones budget.

Swansen started his first council meeting amidst good natured laughter from council members that he's in the hot seat now. He ended it with an unflinching look at the city's books and a plan to start a new chapter for Sunnyside's fiscal future.

"That's why we brought him here," Hancock said.

It was an audacious start.

"There are bold city managers and old city managers," the 40-something Swansen smiled. "I'm trying to be both."

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