Half Moon Bay Faces on the Financial Brink

Half Moon Bay, CA's city manager riding the municipal debt wave!

Inquiring minds are reading about the issues that the City of Half Moon Bay is battling with and the ugly fallout:

This coastal city next month will begin an aggressive campaign to warn residents of severe budget cuts that lie ahead, as the cash-strapped town tries to avert insolvency.

Laura Snideman, appointed earlier this month as Half Moon Bay’s city manager, says she and the five-member city council and top managers will meet in the next few weeks with residents to alert them about impending changes, such as potentially outsourcing the town’s 15-person police department to an outside agency.

The city has planned as many as a dozen meetings and will have a town hall gathering at the end of January, says Ms. Snideman. She adds that Half Moon Bay hasn’t embarked on such an aggressive public outreach before and plans to walk residents through the city budget to show where cuts need to come from.

“The choices are no longer hard, they’re painful,” says Ms. Snideman, formerly an economic development manager in the city of San Mateo. She adds that she hopes by making the case for cuts, some residents will offer ideas or even volunteer to save some services and programs.

And this is not the initial stage of realization that they, the populace, are going to have to pay for what they want:

The campaign is the latest development in Half Moon Bay’s long and winding financial descent, which has made it a poster child of the problems plaguing Bay Area municipalities. While many towns face budget gaps, Half Moon Bay is in especially tough straits. The city already has outsourced some public-works services, including trash, building inspection and health-code enforcement to independent contractors and private companies.

The city of 13,000 is essentially “turning into a functionally unincorporated locale,” says Christopher Thornberg, a principal at consultancy Beacon Economics in San Rafael. “They’re pretty much a city in name only, having turned over or outsourced most of their essential services.”

And why has “the city gone over the falls”?

Half Moon Bay’s problems partly stem from a legal settlement over a real-estate transaction in 2007, when the city agreed to pay $18 million, twice its annual budget of $9 million. The settlement stemmed from a fight the city waged with a Palo Alto-based developer over a 25-acre patch of land that was under development for 83 homes, which city leaders blocked by declaring the area protected wetlands. To satisfy the judgment, the city sold $15 million of bonds and paid $3 million from its annual budget in 2008. The moves prompted leaders to go on a cost-cutting spree, which accelerated when the economy soured.

Got that? It is hard to feel too much sympathy for the beautiful city since they just didn’t want anymore people moving into their city, so they thought they would just buy the companys cost out and, the cost of this is just too expensive.


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