Dateline Hawthorne – The disputed state of the restless city’s finances, especially the budget, remained as gray and amorphous as this morning’s weather following a cloudburst of “shock” at yet another special meeting of the City Council last night.
Contrary to earlier assertions of solvency and stability, the Daily Breeze reported today that first-year Finance Director Rickey Manbahal “admitted he misled officials about the city’s solvency and used millions of dollars in reserve funds to plug huge deficit gaps.”
However, Mr. Manbahal told this newspaper this morning that he never acknowledged “misleading” the Council about the city’s financial condition.
Evidently under orders not to comment, he referred further questions to Hawthorne’s public information officer.
Mr. Manbahal said at the meeting that he presented a budget with a $5.2 million deficit this spring to City Manager Michael Goodson, who later was fired. Mr. Manbahal said Mr. Goodson directed him to erase that number and countered with a scheme to narrow or close the gap through a series of anticipated savings.
The new city manager, Arnie Shadbehr, reacted with “shock” upon learning that possibly uncounted millions of the city’s reserve fund were used to wipe out deficits. He said he would be working beyond fulltime to keep the city from facing bankruptcy during the fiscal year that opens July 1.
Last week’s controversy was that a previously acknowledged $8.6 million now was unaccounted for.
Mr. Manbahal told this newspaper at the time: “The major confusion is the interpretation of reserve and fund balance. I will give you a generic statement. Historically, the way the city has been reporting its reserve, it was a calculated reserve on a fund balance basis. They did not have a special set aside, let’s say a bank account, for reserve.”
Does that mean the city was dealing in estimates in the pre-Manbahal years rather than precise numbers?
“It was not even an estimate,” the finance director said. “They were using our operating fund balance, and then they were calculating that at 10 percent or 20 percent, whatever the fund balance was. That is what they would claim as a reserve.”
Is a misinterptation, or something else, at the core of this latest argument over the Hawthorne budget?
Mayor Chris Brown put it much more starkly:
“As for the structural deficit matter, every finance director has his own way of doing things. When the new city comes in (days ago), the city manager restructures how he wants the structural deficit to look.
“The truth is, there is a $17.9 million bank account (for the city of Hawthorne), and you have a negative $5.2 million bank account. Where is the debt? Where is the debt?”
Instead of fretting over these types of finances said Mr. Brown, City Hall should be concerned about two matters: “taking care of its own employees and public safety.
He said members of the Hawthorne Police Dept., only have enjoyed four raises in the last 25 years, and “they are deserving of one today.” The mayor said he was not at liberty to identify the size of the sought raise, which will be voted upon, as part of the fiscal year budget, at the June 23 City Council meeting.
