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City denies group’s renewed bankruptcy claim

Submitted by on 1, January 23, 2009 – 8:30 amNo Comment

A group that recently released television ads saying the city is nearing bankruptcy said it has fresh evidence to support that claim, while city leaders continue to maintain it’s untrue.

A press release from Save Our City! Alameda, which opposes development plans at Alameda Point, says an e-mail from Fire Chief David Kapler to department staff which was leaked to the group claims the city is facing bankruptcy in the next three to four years. But Kapler said the message of his e-mail, which discusses fire truck and ambulance brownouts slated to begin Monday, was just the opposite.

“There’s no indication that the city is going to go bankrupt,” Kapler said.

In the e-mail, which was provided to me by SOCA spokesman David Howard, Kapler said: “If the city does not adjust spending, the city would be facing bankruptcy in as little as 36 – 48 months. If that were to happen the impact to the department and its members would be much worse than temporary brownouts.”

Howard said that’s evidence that the city is in financial trouble, and he accused city leaders of trying to hide it.

“It’s straightforward. The city’s in bad financial shape. They’re in worse shape than the city manager and the City Council let on,” Howard said. And he said he believes mismanagement by city leaders is to blame.

But Kapler said the message of his January 13 e-mail was that the city needs to change its spending habits in order to continue to balance its budget. He said three to four years is the time it would take the city to spend all of its cash reserves if it didn’t make cost-cutting moves.

“If we keep spending more money than we’re putting in, eventually your bank account is going to go empty,” he said. “We’re simply adjusting to the same economic conditions that the whole rest of the world is.”

Mayor Beverly Johnson said the city is not nearing bankruptcy, but it is facing serious financial challenges – challenges that many other California cities are also facing. And she said the council has discussed those challenges in public meetings, including several hearings on budget cuts.

“I don’t think we’re in denial about the serious problems we face. If we don’t change the course of how we do business now, we’ll face a situation where our expenditures are more than our revenues,” Johnson said.

The city is hosting a public budget workshop on February 7.

SOCA will be holding a press conference at 6:15 p.m. Saturday about the e-mail and the city’s financial status at the Alameda Free Library, 1550 Oak Street. The press conference will be followed at 7 p.m. by a panel discussion on the city’s budget crisis and Alameda Point. Panel participants include Howard, Domenick Weaver of Fire Fighters Local 689, and George Humphreys and Dale Smith of the Restoration Advisory Board.

I’ll have the full text of the e-mail up for you in five.

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