Atwater budget plan greeted with relief

mnorth@mercedsunstar.comJanuary 29, 2013 

— Months of work culminated Monday in a revised budget proposal for the current fiscal year that officials describe as a step toward financial stability.

Frank Pietro, Atwater's interim city manager and police chief, introduced the financial plan at Monday night's council meeting. It calls for general fund expenditures to total about $11 million, which is $2.1 million less than proposed in June for the 2012-13 fiscal year.

Had the council approved that previous budget proposal, it would have put the city in the red by about $3.6 million on top of the pre-existing deficit, Pietro said. Because it was a two-year budget, the deficit would have grown to about $7 million.

But that proposal was made before the city fully understood the breadth of its fiscal crisis.

In July, word started to spread between city officials that restricted money was being spent to cover general fund obligations. The reserves were gone and the city was in trouble.

Before Monday's budget was presented, Mayor Joan Faul commended Pietro and others who worked on the revised plan -- a job that took days, nights and weekends.

"I just want to thank you very, very much for all your work because we were in a disaster, and these young people have brought us down so we're almost there," she said, drawing applause from the audience.

Much of the work that went into the most recent budget involved identifying revenue and cash flow, according to officials with Municipal Resource Group, a financial consulting firm hired by the city.

Their agreement was renewed at Monday's meeting and the firm soon will start working on the 2013-14 fiscal year budget with Atwater's management.

Mike Oliver, managing consultant for MRG, said the city took a big step by completing the 2012-13 fiscal year budget, but a lot of work remains.

"The real task lies ahead and that's with the (fiscal year) 2013-14 budget," Oliver said. The goal there is to have a balanced budget with enterprise funds that are self-sustaining.

"That's a tall task," Oliver said. "It'll require a significant amount of work between now and then."

The city's latest budget still has a shortfall of about $650,000, but Pietro said he's hopeful the budget for fiscal year 2013-14 will be balanced.

After the meeting, Councilman Joe Rivero said the financial situation is looking up with the new budget, noting that the numbers are presented in a clearer and more objective way than they were in the past.

"We're getting more realistic," he said.

The majority of Atwater's general fund is dedicated to police and fire services, accounting for 64 percent of expenditures.

The Police Department's budget has been reduced to $4.7 million from $5.8 million in the 2011-12 fiscal year. Much of that came from salary concessions from the Atwater Police Officers Association.

The city contracts with the California Department of Forestry and Fire Protection for fire service. The budget totals more than $2.3 million, which is down slightly from the 2011-12 fiscal year's total of nearly $2.4 million.

Management has relied on early retirements, layoffs, salary reductions, benefit reductions and other strategies to reduce the city's work force by 11 full-time positions, according to Pietro's message in the proposed budget.

Those efforts are set to save the city more than $2 million a year. Other reductions in the operating budget have helped to cut costs by about $100,000 a year.

Budget talks will continue during a Feb. 11 City Council meeting when the financial plan will be considered for adoption.

Reporter Mike North can be reached at (209) 385-2453 or mnorth@mercedsunstar.com.

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