By Francisco Ramirez – March 11, 2025
Lindsay’s financial stability teeters on the edge, prompting a unanimous 5-0 vote at the March 11, 2025, City Council meeting to approve a sweeping corrective action plan. Responding to a December 2024 state audit that branded the city “high risk” for the second time in three years, leaders are racing to reverse a decade of fiscal missteps—or risk bankruptcy.
The audit, echoing findings from 2015 onward, slammed Lindsay for deficit spending, negative fund balances, weak internal controls, and a lack of governmental accounting know-how. “The city has overspent its budget, leading to a shortfall requiring significant cost-cutting,” Finance Director Lacy told the council, citing violations of grant agreements and restated financials that flouted GAAP standards. The state now demands progress reports every six months, with the first due June 19, 2025—a mere four months to show improvement.
The corrective plan is ambitious and urgent. To slash general fund spending, 22 positions—vacant or unfilled roles created during COVID—will be frozen through next year’s budget. “We’re reducing to pre-COVID staffing levels,” Lacy explained, noting one-time pandemic funds masked deeper issues. The city will adopt zero-based budgeting to eliminate deficits by June 30, 2025, establish a three-month expenditure reserve by 2026, and bolster it by 2027. “We have to completely eliminate unnecessary spending for a year or two,” she warned, stressing strict adherence.
Enterprise funds are also under scrutiny. Water, sewer, and refuse transfers have been adjusted—$105,741, $83,361, and $633,765 annually, respectively—reflecting current rates and a 2022 study. New water and sewer rates, enacted via Prop 218 in January, aim to make these accounts solvent by year-end, targeting a $1 million reserve in five years for emergencies like well failures. “It’s in progress,” Lacy assured, with management tasked to deliver.
Internal controls, a root cause of deficits, will be overhauled by October 2025. “Every transaction needs proper documentation,” Lacy said, outlining centralized oversight, cash handling rules, and fee schedules to cover costs. Long-term planning, previously absent, now includes meaningful financial reports for council—unlike last year’s $1.7 million negative budget approval—and biannual five-year projections starting in 2026. Rising retirement costs will be tackled through union negotiations by June 2025, with the state auditor in the loop.
Council debate revealed tensions. “There’s pushback from staff—it’s hard to adapt,” Lacy admitted when pressed on resistance. Public safety staffing, frozen at 25 (above pre-COVID’s 19), sparked concern. “If we lose officers, response times will go up,” a council member warned, fearing service cuts. Lacy countered, “We’re well ahead of where we were,” but acknowledged past overstaffing with now-vanished COVID funds. “It takes a village to turn this boat around,” another urged, framing insolvency as a looming state takeover disbanding the council. No public comments were recorded specifically on this agenda item, though the gravity of the discussion hung heavy in the room.
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