In 2008, the Buttonwillow
Recreation and Park District took out a roughly $4.9 million loan to construct
new amenities for residents. The improvements included a new gym and swimming
pool, but now the debt payments are proving to be unsustainable.
A drop in the price of oil
since the loan was taken out has reduced the district’s revenue. Since 2017,
the district has operated at a loss, and a roughly $400,000 reserve fund is in
danger of being eliminated within five years.
“When the cost of a dream
outstrips the revenue, you can find yourself in a dilemma; the same can happen
to a government entity,” the grand jury report reads. “Reduction of expenses
has helped reduce the gap, however, the fact remains … dilemma versus dream.
Can the dilemma be solved?”
An agricultural community
with 1,443 residents according to the last census, Buttonwillow nevertheless
contains a well-regarded recreation district. In addition to a gym and pool,
the loan financed the construction of a weight room, office space, softball
field, soccer field and children’s wading area.
The district refinanced
the loan in 2017, bringing the monthly interest rates from 5 percent to 2.5
percent. Still, this fiscal year, the bond repayment is projected to take up
around 77 percent of all the district’s revenue. The district expects to
operate at a $95,557 loss this fiscal year, an increase from the $79,011 the
district lost the previous fiscal year.
But board chair Andrew
Houchin said he is not losing sleep over the budget.
“There’s really nothing to
worry about,” he said in an interview with The Californian. “When you’re tied
to oilfield and property tax stuff you are kind of used to this type of stuff,
which is why we’ve been smart about setting stuff aside for rainy days.”
In the boom and bust cycle
of oil production, Houchin believes prices and property tax assessments will
rise again soon enough.
“It’s something that we’ve
planned for. We knew that oil prices have been in the can for a while,” he
said. “It’s something that we’re not worried about because of the contingency
plans.”
The grand jury recommended
the district seek advice about potentially instituting a parcel fee to help
make up for lost revenue. Such a fee would need to be brought before voters.
Other recommendations include installing solar panels to reduce energy costs
and selling naming rights for the stadium.
The district’s troubles
could be seen as an unintended side effect on the state’s oil policies. Under
Gov. Gavin Newsom, state regulators have halted the permitting of new oil
production, which Kern County officials say impacts the services that are paid
for by taxes on the industry.
“Buttonwillow's board of
directors understands they have a fiduciary duty and they are making sure on a
monthly and daily basis that the future is going to be bright in Buttonwillow,”
said Les Clark, general manager for the West Side Recreation and Parks
District, which manages the Buttonwillow district. “But obviously the
community, and Kern County, needs to understand what the state of California is
doing to the oil industries by not allowing our guys to drill. It effects
special districts like Buttonwillow.”
The board has not met to
specifically address the problems highlighted in the report, but Clark added
some of the questions posed by the grand jury had answers.
The district has 90 days
to issue a formal response.
Bakersfield.com
Sam Morgen
February 1, 2022
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