Incoming Town Manager Dave Wilbrecht has a new best friend, and her name is Marianna Marysheva-Martinez.
A numbers wonk and a high-ranking city administrator in Oakland before she became the Mammoth Lakes Interim Town Manager, the first thing Marysheva-Martinez did was look at the town’s financials.
Her conclusion was dire.
“We’re in stable shape right now,” she said, “and the reason is that our revenues will be up by the end of June but our expenditures will be up by almost the same amount.
“While we’re stable, we’re not in good shape.
“Next year is going to be bad.”
In a report released last Friday, Marysheva-Martinez said many of the town staff do not know what’s in the budget or out of it. She said many of the numbers are phantom projections.
She said much of the projected revenue to the town is wishful thinking.
Moreover, she said the town has never done such a comprehensive and inclusive examination of its books.
So, while the snow fell and piled up outside her office window this winter, Marysheva-Martinez cracked the whip, crunched the numbers and kicked the behinds of the slow movers and non-thinkers.
“The process involved all department directors and many other town staff, who reviewed every line item in the town’s budget, both for revenues and expenditures,” she wrote in her report.
Thus, when Wilbrecht (currently Mono County’s Administrative Officer), takes over the job in June, he will have a nice, fat, concise outline of where the town is, financially.
It’s a mixed bag
“The town ended the last fiscal year with a surplus in the general fund and an overall fund balance of $14 million,” Marysheva-Martinez said in her report, but she included a crucial caveat.
“Of the $14 million balance, however, the majority of funds are yet to be received and may not be collected for many years, if it all.”
For example, she said that annual subsidies to the airport are recorded as notes, “but the airport simply does not make money to pay the town back.”
Another example is that money fronted to the Development Impact Fee funds “is not likely to be seen until the town sees a surge in large development projects.”
Moreover, the General Fund Reserve for Economic Uncertainty is only $1.3 million – seven percent – well below the 25 percent goal set by the Town Council.
She said that this year’s General Fund revenues are projected to be $2.3 million above budget, mostly because of conservative spending by the council and a great snow year, translating into higher transient occupancy taxes.
“The higher General Fund revenue is almost entirely offset by increased expenditures.”
First, some of it went to tourism, transportation/transit and workforce housing. Second, some of it went to fix “erroneous revenue assumptions” and “unrealistic” savings estimates in a couple of departments, with year-end actuals likely to be nearly $1 million higher than the budgeted estimate.
Finally, part of the surplus revenue occurred at the airport “due to litigation costs,” and to the Mammoth Lakes Police Department, “due to staffing changes and corresponding payouts.”
Even so, Marysheva-Martinez said the town’s general fund is expected to end the year with a $400,000 surplus, increasing the reserve for Economic Uncertainty to nine percent, still well below the 25 percent the council thought it had, going into the fiscal year.
But wait! There’s even more bad new.
“The town staff has been warned of losing up to $1.8 million in property tax-related funding due to specifics in the State law that impact only a handful of cities and counties in California.”
Moreover, Marysheva-Martinez said that the town will “suffer from the loss of the Utility Users Tax of nearly $1million, and the new budget “needs to allow for some payment on the $30 million (Hot Creek) development judgment.”
She said settlement discussions on that judgment are about to begin.
As Marysheva-Martinez begins the transition out of town government and hands over the reins of control to Wilbrecht, she concluded her report by saying,
“There is no doubt that the town will need to creatively approach next year’s budget, as resources will be extremely limited while demand for scarce funding will increase.
“The town is exploring, among other creative solutions, options to increase collection of the Transient Occupancy Tax through enhanced monitoring and enforcement.”
The Town Council is scheduled to see preliminary financials for the 2011-12 budget on May 18. It must adopt the new budget by June 30.
By then, Wilbrecht will be settled into his new position, with only about a billion things on his plate.
One of them will be Marysheva-Martinez‘s very helpful, but rather dire report.
Welcome back to town, Dave.