RIALTO - It was late February in 2010 when former City Administrator Henry Garcia issued a warning about the city's finances.

Rialto, he said, had a "36-month window" before it faced a financial crisis brought on by a gasping economy and skyrocketing public employee costs.

Garcia has since moved on to a $400,000 job as city manager in Moreno Valley.

Officials here are still staring at the window.

In early December the City Council voted to place an extension of the 8 percent utility-users tax on the March ballot.

A resolution for the council vote said "an emergency exists in the finances of the city of Rialto" due in part to a decrease of revenues in each of the past six fiscal years and the rising costs of providing city services.

Indeed, even as San Bernardino trudges through Chapter 9 bankruptcy protection, the Finance Department here has warned that without an extension of the utility-users tax, which brings in roughly $11 million annually, Rialto could see massive cuts to public safety and other services in order to avoid bankruptcy.

"I think the community's perception has changed a bit," City Administrator Mike Story said. "They love us, but they can't afford us. We have to be paying for our own stuff."

Finance officials are looking for ways to do that as the city wrestles with a $7.6 million budget deficit and continues to spend economic reserves in order to maintain services.

The next few months will provide a clearer picture of whether Garcia's dire prediction will come true.

Story said the new year will see labor groups contributing to their pensions, and negotiations will kick into high gear as the city hopes to gain some concessions.

The City Council in 2008 sweetened pensions for police and firefighters by approving a "3 at 50" plan that allows one to retire at age 50 or later and take 3 percent of his final pay-year for every year of service.

Non-safety employees saw a bump to 2.75 at 55, meaning they could retire at 55 and get 82.5 percent of their final year's salary to live out their golden years.

Salaries and benefits make up the lion's share of the city's budget.

Employee contributions to retirement are a good start, but "it's not a place to stay," Story said.

With contracts expiring on June 30, he hopes labor groups - which include police, firefighters and other employees - will consider dollar amounts to concede, as well as "philosophical" changes to labor contracts.

That includes items like sick time and vacation accruals, overtime, holidays and cashouts.

A mid-year budget adjustment will be announced in February, and voters in March will decide whether to extend the utility-users tax.

"And that'll give you a better window of what we're looking at," Story said.

With some service cuts already made, and previous employee concessions, Story said the reserves, which could go as low as $7 million by July, may be extended through fiscal 2013-14 without being depleted.

Mayor Deborah Robertson said as the city prepares to enter talks with the unions, she will also ask department heads to see if more consolidation can be done at top levels in City Hall.

That means looking at the ratio of supervisors to rank-and-file employees and reorganizing in a way that won't necessarily mean cutting jobs, she said.

"There's only so much you can do in terms of the reorganization of the city," Robertson said.

Robertson also has met with developers to look into moving projects along in the next two years.

"The city doesn't benefit when there's nothing in the ground," she said.

Robertson said rather than taking a sequential approach to the city's financial problems, it's important to work out "parallel" solutions.

The city may also revisit a tax on petroleum companies in the city, Robertson said. Voters in November rejected a $5 million tax on the companies, but Robertson said a similar measure may be put on the June ballot.

Story said the city can't "keep going to the well" of service cuts, and that "we have to go with where the money is at."

That means personnel costs. 

"There's still more that needs to be done," Story said. "This is just a start. Otherwise it's going to be a much steeper fiscal cliff for us without it."


Reach Joshvia email, call him at 909-386-3894.