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Money Man

news2The new financial director looks into the future of Santa Cruz’s economy

Following the retirement of the City of Santa Cruz’s financial director, Jack Dilles, in 2011, Santa Cruz County local Marc Pimentel came out on top of a nationwide job recruitment search.

“He competed really well with some very strong candidates,” says City Manager Martin Bernal. “He’s a strategic thinker, not your run-of-the-mill accountant. We wanted somebody that can identify trends and issues in place in the city, look at what might be affecting the city in the future, and be proactive instead of just reacting.”

Bernal adds that the job of both the financial director and city manager is to focus on the long-term financial stance of the city. Pimentel’s knowledge of the area on top of an extensive background in finance came together make him “best for the job.”

Pimentel, who officially started as financial director on March 14, was born and raised in Watsonville, and says his fondest memories include visits to the Santa Cruz Beach Boardwalk with his grandmother, and trips throughout the years to the beaches, mountains and parks in town.

 “I feel fortunate to have an opportunity in a city that I have a real intimate knowledge of,” he says.

Pimentel brings 17 years of government accounting and financial management experience to his Santa Cruz post. He has been the administrative services director for the City of Watsonville for the last six years, overseeing a $100 million annual budget. He was the first accountant for the City of Capitola in 1995, and worked as financial services manager for the City of Monterey.

Pimentel also has work experience with local nonprofits and governing boards. Currently, he serves as chair of Salud Para La Gente and local chair for the California Society of Municipal Financial Officers.  

Bernal notes that this part of Pimentel’s background is important because looking to the long-term financial future, the City of Santa Cruz will consider partnering more closely with the nonprofit sector to work on economic development projects.

“We’ll basically have to get really creative,” he says. “[Pimentel] is a creative thinker.”  

Pimentel says working in finance through the recent economic downturn would have been impossible without the support of his wife Laurie and two young daughters, Kaitlynn and Kirsten.

“These have not been easy years,” he says. “They’ve been emotionally and physically draining from a finance perspective, so it’s been really great to have a strong family who’s there to support me.”

The financial situation in Santa Cruz has seen significant improvement since 2010. One and a half years ago, the City of Santa Cruz faced an $8 million deficit. In response, the city evaluated a five-year budget projection plan, and in 2011 began actions to combat its gaping budget gap.

Overall, Bernal says the problem was that the city’s expenditures far outpaced its revenues. The largest gap in the budget was in the general fund, in which expenditures on city personnel were the primary issue.  

To alleviate the situation, the City of Santa Cruz implemented 10 percent overall cuts to city personnel compensations and expenses. The city also put a furlough program in place that reduces the 40-hour workweek to 36 hours for city employees.

The current budget projects a $1 million budget deficit by the end of the current fiscal year on June 30, which Bernal says is easily affordable within the city’s fund balance. In fact, Bernal says the current budget situation in Santa Cruz is relatively healthy.

“Looking ahead into future years, we anticipate being between $2 and $4 million in the red, which we can definitely handle,”

says Bernal.

In order to maintain financial well-being into the uncertain economic years to come, the city has limited their future expenditures and kept its reserve fund levels up.

 “Theoretically, we could continue to operate status quo for two to three years,” he says. “We have enough flexibility and controls in place that I think we can weather things.”

Bernal notes that while the city is not “operating on a shoestring budget,” they are not over-extending resources either.

 “Now, projecting forward, we’ve addressed a big chunk of our structural deficit,” he says. “We’re still projecting some deficit problems and we’re being really careful about our future obligations moving forward.”

Pimentel says from what he has seen, the City of Santa Cruz staff is well-organized financially, so his goal is to make the shift into his new title as easy as possible.

“I’m reading as much data as I can from a finance perspective, and the staff is keeping me up to date on decision making that’s been done thus far,” he says. He adds that the approaches of the Santa Cruz staff are different from those in Watsonville, but he anticipates a smooth transition.

 “I’m always trying to live in the moment but be prepared for what’s going to happen five years from now, and that mentality lends itself to adapting to any organization,” he says. “In Santa Cruz, the finance department has a high level of professionalism and the staff are extremely qualified. I haven’t seen anything so far that gives me pause or that I would want to modify.”

Comments (1)Add Comment
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written by Bill Smallman, March 14, 2012
I'd like to support and welcome Marc and wish him much success. I really think economic development is the most important issue to concentrate on, and hope to offer some thoughts to brainstorm on for Santa Cruz. With a revived economy, we can then start looking at other issues. In regard to Santa Cruz, I am still questioning why the Coastal Commission has been granted power over the City and had the final word on La Bahia. Due to the large negative impact, I believe the City should perhaps investigate ways to revise the jurisdiction powers of the Coastal Commission. Santa Cruz enjoys a large tourist economy from it's main attraction of the Boardwalk and Wharf, but we all know this mainly during Summer months. Other coastal cities have waterfronts which attract tourism dollars all year round. The reason why Santa Cruz doesn't is basically because next to the Boardwalk is basically an area most people try to avoid. I believe if this was improved, and in the colder months when the Boardwalk is only partially open, tourists would still be attracted to an area improved similar to waterfronts like Capitola, Santa Barbara.. the list goes on and on. On another topic, in 1994 I worked on the Santa Cruz $70+ million sewage treatment plant upgrade, and the water is almost treated enough now to be used as reclaimed, irrigation use only, water. I believe this water is still discharged out to the ocean. For a very beneficial water conservation measure, a distribution system could be installed to distribute water to landscape, sports fields, and farms throughout the area. This would be economically beneficial for reasons by the fact that $115+ million would perhaps not be spent on a desal plant which will raise water rates, as the cost of water is 4-5 times more than conventional water sources.

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