August 25, 2024 8:59 PM
08/25/2024 - Investigation by New Sunnyside City Manager reveals the city is facing a nearly 4-million-dollar deficit.
CITY OF SUNNYSIDE PRESS RELEASE
FOR IMMEDIATE RELEASE
Date: August 25, 2024
Contact: City Manager Mike Gonzalez (509) 836-6300 mgonzalez@sunnyside-wa.gov
Communications Director Jacqueline Renteria jrenteria@sunnyside-wa.gov
Subject: Investigation by New Sunnyside City Manager reveals the city is facing a nearly 4-million-dollar deficit. 2023 Monson Property sale that didn’t go through is largely to blame. ARPA spending also a factor.
When Mike Gonzalez was hired as City Manager in July of this year he promised more transparency, honesty, and to always shoot straight with the City Council and residents of Sunnyside. During Saturday’s budget retreat, Gonzalez certainly delivered on that promise.
“I truly believe bright days are ahead for Sunnyside, however we are going to hear some things in this budget that are painful. I don’t think today is the day to point fingers or blame. Things are what they are. I’m not going to sugar coat it. Council, we have turned over every rock and we could be facing a nearly 4-million-dollar deficit heading into 2025,” said Gonzalez.
HOW DID WE GET HERE?
Gonzalez said the city is facing the effects of inflation, high healthcare costs and increasing prices for supplies. He also said adding the sale of the Monson property, and ARPA spending on 6 permanent positions that were approved in 2022 is having a big impact on the 2024 budget and how things are shaping financially for 2025.
“Those things are not lost on the city. For us to operate is really, really, really expensive. Sales tax revenue hasn’t been as robust. The price of houses and interest rates have an indirect effect on cities also. Certainly, the use of the Monson property as revenue in our 2024 budget was ill advised. There’s no way to sugarcoat that. That was a 4-million-dollar expense, that we were hoping was going to come through,” said Gonzalez.
Gonzalez told the city Council he’s spoken to the developer of the Monson property and he’s confirmed that he won’t have investors in place until 2025 at the earliest.
“I’ve had the opportunity to speak with the developer yesterday and he put in the record that will not come through until 2025. I still think it’s a great project that we have to support,” said Gonzalez.
Gonzalez also said the $950,000 payment to the Port of Sunnyside for the Midvale Road project also was a huge burden to this year’s general fund.
NEW CITY COUNCIL MEMBERS EXPRESS CONCERN
The budget deficit revelation was extremely frustrating to hear for all 7 city Council members. It was even more difficult for the three new members of Council that include: Vicki Frausto, Deputy Mayor Jorge Galvan and Karen Vazquez. All three began their terms in 2024 and were not part of the budget decisions that are coming to light. Councilwoman Frausto was extremely critical of spending one-time dollars of ARPA on permanent positions.
“It’s a little concerning to me, because what I am hearing is that decision was made and the City Council approved it, but there was no preliminary conversation for planning for the ongoing expenses, as soon as these monies were no longer available,” said Frausto.
According to Mayor Dean Broersma the issue of spending one-time ARPA funds on permanent police positions was discussed multiple times by previous Councils. Broersma said the 2022 shooting of a teen at the Cinco de Mayo Festival also factored in to the use of the ARPA funds.
“Council responded to the needs expressed by the citizens. We had very full Council meetings after that. People were infuriated that had happened. We did want to respond to that, and we didn’t want to see an incident like that ever occur again,” said Broersma.
Mayor Broersma also discussed the Monson property. “We went into that and we knew there was a risk. We took that risk, and even if the Monson sale had happened, we would have had to have some difficult conversations at this point because we could not continue to operate off of a real estate transaction,” said Broersma.
WHERE THE CITY GOES FROM HERE?
Gonzalez told the City Council members he’s taking immediate action. He’s hired the firm GMP Consulting to assist with the 2025 budget and to perform a detailed audit of the 2024 books. The project will be led by former City of Pasco and Yakima City Manager Dave Zabell. Zabell attended Saturday’s budget retreat and addressed Council about the project.
“Mike Gonzalez has asked me to come in and look at the city’s finances to tell the story of where we are at, and how we got there from a financial standpoint. Then we will make recommendations on sustainability moving forward. It’s more than likely going to take reductions and revenue enhancements to correct this,” said Zabell.
Councilwoman Frausto addressed Zabell and Council members on her feelings about how the city’s budget got to this point.
“I know you mentioned we shouldn’t attach ourselves to what happened or with the what if’s. But we have every right to express our frustrations and those frustrations should be valid because it should never happen again. I don’t understand why this lot wasn’t even sold, yet we were accounting for it as revenue. That to me is an irresponsible financial practice. If conversations were being had with former City Manager Elizabeth Alba and Finance Director Jamison Horner back in January and February, why wasn’t it brought to Council? Why are we just learning about it? Why didn’t Mr. Beeler know about it? Why didn’t Vicki Ripley know about it? Or did I know about it? I will not sit here and take responsibility for something that I did not approve or have a conversation that I did not partake in. That is also irresponsible for someone in leadership to do. To kick the can down the road and then let them figure out all of this,” said Frausto.
Sunnyside Finance Director Jamison Horner told the Council she had voiced concern to the prior City Manager about the 2024 budget. “I had said we need to do something about this. This is a problem. I am not the person who made the decision to use one time money. I am not a decision maker for the city just to explain my role when it comes to these numbers. I put them together for you based on the direction of the City Manager and based on the request of each department. That’s what I do, that’s my role. I don’t get to approve. I make recommendations and if those recommendations aren’t followed, I don’t have a recourse for that. I present that to Council and they approve it, said Horner.
New City Manager Mike Gonzalez says from this point forward the Sunnyside City Council and residents will know every step of what’s going on. “I have promised transparency and that’s what you will see from this administration,” said Gonzalez.