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Healdsburg budget gets boost with accounting change

Healdsburg's financial fortune seems to have reversed overnight Monday. A new look at the city budget shows a $1 million ending balance in this year's general fund, instead of an anticipated deficit.

But rather than a windfall that erased the previously forecast gap of $808,000, the reason was an accounting change in the way the city calculates the sick time, vacation, leave and workers compensation for employees.

Essentially, city administrators said the city for years has been setting aside too much in those areas, resulting in actual expenditures coming in significantly lower than budgeted.

"Every year, there were overstated personnel costs," City Manager Marjie Pettus said. "Department heads said, 'It's not fair. The accounting practice is increasing my budget.' "

The city instead has decided to move to a new system that will budget for personnel costs based on a three-year average of what is actually paid to employees.

City Council members cautioned that doesn't mean the city is suddenly flush.

"It can be spun in a lot of different ways. It's not just money that came out of the blue," Councilman Tom Chambers said.

But the new accounting approach was quickly criticized by Tim Meinken, a former City Council candidate.

"What a shell game that is," he told The Press Democrat. "The liabilities still exist. They made them unfunded."

He said the city will still owe employees what they have accrued for unused sick time and vacation when they leave the city.

"They push it out to the future when people leave," he said

While workers may collect some of those unused benefits when they leave or retire, city officials noted they will not be entitled to collect workers compensation and unemployment that has been set aside in the budget.

"We're bringing it around to be more transparent," Pettus said of the city's accounting shift. "The liability is still out there. We don't expect everyone to leave at once. It allows more money for operations."

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