City Council to respond to auditor's report

WATSONVILLE — On Tuesday, the Watsonville City Council will respond to an auditor's report that was recently released by the Santa Cruz County Grand Jury, which criticized the city's financial situation.

City leaders will agree and disagree with a number of findings from the report.

The independent audit was conducted by Harvey M. Rose and Associates, which was commissioned by the Santa Cruz County Grand Jury.

The audit claimed that the city is in a weak financial position, focusing on Watsonville's General Fund, which it found to be in constant decline over the past five years.

At the end of the fiscal year 2010-11, the city had approximately $1.6 million in General Fund balances, down from $6.6 million during pre-recession 2007-08, the report stated.

The past two years saw that revenues were less than expenditures, and this trend was even more pronounced within the General Fund, according to the report.

The audit acknowledged that while the city has made "significant reductions" in General Fund expenditures over the past two years, it has not been sufficient enough to offset the spending.

According to a report by Ezequiel Vega, administrative services director, the city agrees with that particular finding, noting the effects of the Great Recession, and said it is working on a long-term plan to bring the city's reserve's "to a more acceptable level."

Vega will present the report to the council Tuesday.

For the complete article see the 01-19-2013 issue.

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