Citizens Financial Advisory Group Gets Going

In their first meeting Monday night, Hercules’ newly formed Citizens Financial Advisory Ad Hoc Committee sat down with Finance Director Liz Warmerdam and interim City Manager Fred Deltorchio to get a briefing on Hercules’ complex financial problems and the immediate plans to try to save city funds.

The committee—made up of residents William Wilkins, Hector Rubio, Gabriel Naguit, Virgilio DeLa Vega and Frank Batara—was assembled by the City Council last month to advise the council and city staff on ways to conserve city funds.

Warmerdam and Deltorchio, both new to their positions, gave a rundown to the group on one of the city’s most urgent matters—the Sycamore North Project. The city hopes to slow the heavy outflow of Hercules funds, caused partly by expensive consultants used on unfeasible redevelopment projects, by trying to sell off Sycamore North.

The mixed-use project, made up of 40,000 square feet of commercial space on the ground floor and 96 residential units above, is in its mid stages of construction and is poised to put the city at a $42 million dollar loss.

The city has applied $32 million towards Sycamore North, including a $3.75 million state loan, and needs another $38 million to complete the project, Warmerdam said.

The city plans to put Sycamore North on the market March 1 and predicts selling it by Oct. 1, Deltorchio said, adding that between now and October, Hercules will likely spend another several million dollar into the project in construction costs.

Warmerdam said that other than the Intermodal Transit Center, which has $22 million in time-sensitive grants, all city developments have been put on hold.

Even if Sycamore North was sold at a marginal profit, the city would still face serious financial hardships, resulting tough decisions.

Warmerdam and Deltorchio told the committee that as deficits in the city’s general and redevelopment funds steeply climb in the coming months, layoffs, cuts to city programs and a halt planned projects would ensue, and the committee would be asked to help figure what’s expendable for Herculeans and what’s not.

"If we had seen this earlier, these cuts wouldn't have seemed so (dramatic)," Warmerdam said about the city's troublesome financial projections, which were only recently released to the public.

For now, the advisory committe still has to figure out a second meeting time. The next meeting will likely be scheduled around the time Hercules gets its in-depth audit, performed by Municipal Rescource Group.

Correction: When this story first ran, it implied that the city could make a marginal profit on the sale of Sycamore North, which it cannot.