New Year, New Mayor, Old Problems

Banning city council members will decide among themselves tonight who will replace Councilman Bob Botts as mayor for the coming year, but whoever that is must quickly begin grappling with the city's growing financial and other problems.

While all four of Botts' council colleagues are eligible, Mayor Pro Tem Barbara Hanna and Councilmember Debbie Franklin are considered the front-runners over John Machisic and Don Robinson. Franklin recently won a hotly-contested reelection campaign and Botts retained his seat by about 200 votes, but is termed-out as mayor.

Whatever the outcome, the new mayor will be faced with a municipal budget seriously out of balance and criticism over the direction of downtown redevelopment.

Since 2008, general fund revenues have plummeted and deficits have mounted, forcing staff reductions that Public Works Director Duane Burk describes as "below skeleton crew."

In fiscal year 2009 general fund expenditures exceed revenues by $2.4 million, an increase of nearly $800,000 over the $1.6 million shortfall in 2008. When the city's annual report for the 2009-2010 fiscal year ended June 30 is released in coming weeks, the financial picture isn't expected to be any brighter. Revenues for the current fiscal year ending June 30, 2011 are estimated at $11.3 million, a decrease of more than 25 percent over 2008.

One of the biggest obstacles to a balanced budget is the recession-fueled decline in tax revenues flowing into the general fund. In 2008 the city collected about $9.2 million in taxes, but saw that drop to $8.5 million in 2009.

Another financial hurdle will be managing Banning's total long term debt, which totaled about $138 million in 2009, much of that incurred by city-owned utilities, who have been unable to hold their own. Over the past year 500 utility customers have disappeared, creating a revenue shortfall of more than $1 million and forcing the council to raise rates dramatically. With about $85 million in outstanding revenues bonds, debt service will be an issue facing the council.

Hanna says if new tax sources don't materialize the city could face another round of service reductions.

"As staff levels are cut to the bone, further cuts would have to be made to services," said Hanna. "Parks, for example, could shut down."

Redevelopment of a deteriorating downtown could be one source of needed additional tax revenue.

But the two perceived mayoral front-runners harbor sharply differing views on the merits of development activities, especially when it comes to the Banning Cultural Alliance, a controversial tax-exempt non-profit that has collected more than $800,000 from the since 2005 to spearhead downtown renewal efforts by promoting cultural and development activities.   

Hanna strongly supports the , while Franklin has questioned the organization's effectiveness.

A county Grand Jury  earlier this year was highly critical of the Agency, finding among other things, that it "has committed funds for improving the appearance of vacant, unrented property while ongoing businesses are made to wait for assistance," and questioned the relationship between the Alliance and the redevelopment agency board.

The Grand Jury recommended the Agency seek the immediate return, with interest, of $162,000 paid to the Alliance for work it failed to perform, including $110,000 for a marketing program between 2006 and 2008. But city council members, who also serve as the Agency's governing board, voted to ignore the recommendations.

Like most small cities in California, Banning has a weak mayor/strong city manager style of government with city manager Andy Takata responsible the day-to-day operations with council oversight. The mayor, who runs council meetings, occupies a largely ceremonial position, but could hold a tie-breaking vote.

Despite the city's economic woes and development debate, all four council members seem eager to be mayor.

"I've never met anybody who's been mayor of Banning and hasn't loved it," says Hanna, who last served as mayor more than 20 years ago. "You're invited to everything, and you tend to go. You meet everyone and it's a great experience. You really get to know the people of Banning."

The council meets in city hall beginning at 6:30 p.m.