10:00 PM PST on Monday, February 22, 2010

By DARRELL R. SANTSCHI
The Press-Enterprise

The Grand Terrace City Council tonight will begin grappling with a budget crisis that could drain the city’s treasury for years to come.

In the short term, council members must trim $423,000 from the city’s general fund budget for the 4½ months remaining in the current fiscal year.

Then, they must find a way to pay back $2.6 million funneled since 1990 from the city redevelopment agency to balance the general fund that pays for day-to-day expenses.

Part of this year’s deficit includes a $155,725 loan that was to be taken from the redevelopment agency to bolster the general fund. The city manager will ask the council not to proceed with that loan.

Councilman Walt Stanckiewitz said by phone Monday that he had not been told the city was borrowing from redevelopment agency funds, which he believes can be used only to improve low-income housing and build up the city’s infrastructure.

He acknowledged that some redevelopment money is routinely used to help pay the salaries of city administrators who devote a portion of their time to redevelopment projects. But he said the $2.6 million was siphoned separately.

“We have a gaggle of residents who have been crying … about this kind of stuff for years,” Stanckiewitz said. “They have been pooh-poohed away as gadflies. What this says is, these people were all right. They knew what was going on and no one would listen to them.”

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