Half Moon Bay Faces Insolvency - NBC Bay Area

Half Moon Bay Faces Insolvency

Half Moon Bay has two options: tough budget cuts or bankruptcy



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    This is the shoreline of the city of Half Moon Bay

    The cash-strapped city of Half Moon Bay will face some very tough political choices in the early weeks and months of 2011.

    The city is being forced to find a way to make severe budget cuts.  The other option? Bankruptcy.

    The coming wave of possible insolvency has been building for years, but seemed to crash during the November election.  That's when the voters of Half Moon Bay defeated a local tax measure while at the same time voters of California approved Prop 26 which requires a two-thirds majority vote before a city can increase fees for services or permits.

    That was a big hit for a small city that was already reeling from a legal settlement over a piece of real estate that cost Half Moon Bay $18 million.

    The city has a brand new city manager with a very difficult job ahead. Laura Snideman told the Wall Street Journal last week that she will meet with both citizens and city managers in the next few weeks to go over options. "The choices are no longer hard, they're painful," Snideman told the WSJ.

    The city has dipped into its reserve fund in the past few budgets, making it dangerously low.  Half Moon Bay officials estimate the money will run out by next September.

    The financial clock is ticking.