Re: “Hawthorne $ Dispute Is a Non-Dispute”
Dateline Hawthorne – Rickey Manbahal said that when he was hired 11 months ago — as the city of Hawthorne’s first finance director in seven years — the ledger was in “chaotic condition.”
This was not noted last Friday in a page 1 Daily Breeze story that strongly wondered why the periodic balances reported by Mr. Manbahal have been volatile, and the reporter found a mayoral candidate to buttress the newspaper’s curiosity.
The Breeze did not interview Mr. Manbahal. When the finance director was interviewed by this newspaper, he offered explanations and clarifications that appeared to obliterate clouds of suspicion and doubt raised by the Daily Breeze.
“When I came on board (at the start of the July 1 fiscal year), the budget was somewhat prepared,” Mr. Manbahal said. “They were saying they had a structural deficit. It really was not there. I closed the gap. And I proposed a balanced budget for this current year.
“That was my focus,” Mr. Manbahal said, “not how much was in reserve or what was included in reserve.
“My whole vision is to always have a balanced budget to move forward with.”
It’s sheer logic, the finance director reasoned.
“If you start with a negative,” he said, “it just gets bigger and bigger. You don’t want to do that. My job was to straighten out the city’s finances, and I think I did.”
City Councilman Alex Vargas, one of the challengers to Mayor Chris Brown in next November’s election and an un-shy critic of Mr. Brown, told the Breeze this about Hawthorne finances:
“We have now learned (regrettably) that our city’s budget may not be as balanced as we had been led to believe. Our cash reserves may have been used to make up the deficit. In spite of the mayor’s claims that we were in the black, we may actually have significant red ink.”
Both the Daily Breeze and the mayoralty candidate seemed to suggest something dark was afoot since Mr. Manbahal had reported significantly different reserve fund balances last July, last September and in March.
In response, Mr. Manbahal offered a Finance 101 primer:
“I think (Mr. Vargas) does not understand the fundamental difference between reserves and fund balance.
“As a municipality, we all operate on a fund balance basis. Our budget is established based on projected revenue. Many pieces are included in this. It is not a cash basis where as soon as you take money in, you spend money.
“Our revenue comes in sporadically throughout the year. Our fund balance changes, based on what comes in and what goes out. We always have to maintain x amount of dollars to fulfill our expenditure needs.”
(To be continued)
