8 months late, Atwater leaders pass a budget

mnorth@mercedsunstar.comFebruary 12, 2013 

— The City Council approved a financial plan Monday that's expected to help bring Atwater out of its fiscal crisis.

The budget, which was passed on a 3-0 vote during the meeting, cut general fund expenditures to about $11 million -- $2.1 million less than was originally proposed by a previous city manager in mid-2012.

Mayor Pro Tem Craig Mooneyham and Councilman Joe Rivero were absent from Monday's meeting.

The budget is about eight months late, but Councilman Jeff Rivero said it's better than the previous option that was presented to the council.

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

A general fund deficit of more than $4 million, along with deficits in the water and sanitation funds, led to the crisis that resulted in a fiscal emergency, eight layoffs, pay reductions and service cutbacks.

With the city starting to move in the right direction, Rivero said, it's crucial that management stay alert to prevent similar issues in the future.

"That chapter's over," he said. "Now we're working on a sound fiscal budget and making sure that our finance department is on top of things and making sure our numbers are right."

Rivero said the city still has to collect money from business license fees and unpaid utility bills that could help balance the budget for this fiscal year and the next.

The revenues could total "hundreds of thousands of dollars," he said.

City management is working on a budget for the next fiscal year.

The city's latest budget has a shortfall of about $650,000 in the general fund, but Frank Pietro, police chief and interim city manager, said he's optimistic the budget for fiscal year 2013-14 will be balanced.

"This is a first step in the right direction," Pietro said. "We got this one passed, it's eight months (late), but we're already starting our 2013-14 fiscal year budget."

Judy Bowling, one of the Atwater residents who spoke during Monday's meeting, encouraged the council to delay a vote on the budget until the city figures out how to "make the Police Department whole."

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, but the police force has been cut to 26 officers from 36 in 2007.

During a special election March 5, Atwater voters will decide whether they want to implement a half-cent sales tax hike to augment public safety services in their city.

Though the money could be used only for public safety if passed, some residents are speaking against it, claiming their taxes are too high.

Jim Price, vice president of operations for Gemini Flight Support at Castle, is one of those residents.

"A half-cent sales tax, which is being proposed here in March, is going to be one of those items that is going to be very strenuous financially on the people of this city," he said, citing state tax increases, utility rate increases and high gas prices as reasons why people can't afford any more.

Others argue that the tax is needed to preserve public safety and would put Atwater's sales tax rate equal with other cities in the area, such as Merced.

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

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