ATWATER — The City Council got a glimpse of the city’s finances at the halfway mark of the fiscal year.
Atwater adopted a balanced budget in July 2013 for the first time in three years, but a projection of the figures showed the city’s general fund finances have dipped into the red, the council learned at its regular meeting Monday night.
The city’s general fund expenditures outpaced revenue by $1.2 million as of Feb. 14, according to city financial records. The general fund revenue was at $5.9 million and expenditures were $7.1 million, the documents show.
The adopted $39.1 million budget projected general fund revenues at $11.97 million and expenditures at $11.92 million for fiscal year 2013-14.
However, city leaders said they are not concerned with the numbers because the budget fluctuates throughout the year. Officials said they expect to finish the year with a balanced budget.
“Usually, during the course of the budget year, it dips down as you wait for property taxes to roll in,” said Atwater Mayor Pro Tem Craig Mooneyham. “It’s pretty hard to take a snapshot of where you’re at financially when the primary source of revenue is property taxes. I think we’re pretty much on budget.”
Property tax is one of the largest sources of general fund revenue, according to the documents. This year, the property taxes were projected to be a $2.1 million.
The amount of property taxes brought in by Feb. 14 was $1.3 million, the documents show.
The good news, according to the city’s financial consultant, is that Atwater is taking in more property taxes than it anticipated because of increased development activity.
The city can expect an additional $105,896 in property taxes and $130,000 in business taxes. However, a decrease in sales tax, parking fines and a COPS grant for police services offset the positive increases. The city is left with a surplus of $73,862 in the general fund revenue after the adjustments.
“You’ve stopped the bleeding,” Atwater contract finance director Bill Zenoni said during the meeting Monday. “But because we went four years drawing from reserves, the key is increasing revenue.”
Atwater ended last fiscal year with a negative $3.1 million general fund balance, prompting Zenoni to recommend a formal policy stating the intent to rebuild reserve funds over time and maintain a minimum level of 15 percent of city operating costs.
He also recommended a policy involving inter-fund loans, which includes guidelines for the City Council to approve these type of borrowing practices. Both policies were approved by the City Council in a 4-1 vote Monday, with Councilman Joe Rivero voting against the item. Rivero could not be reached for comment.
The city has no money in its general fund reserve, according to Mayor Joan Faul. She said the city will work toward reducing the $3.1 million deficit and building a reserve by trying to save $1.8 million from the general fund budget each year.
As of Feb. 14, the city’s enterprise funds – water, sewer and sanitation – were in a positive financial position, Zenoni said. The water fund has about an operating surplus of $400,000, the sewer fund is at $2.9 million and the sanitation is about $600,000.
Measure H, a half-cent tax hike for all transactions, passed in March 2013 to support public safety services in Atwater, has accumulated about $606,000 revenue through December.
Sun-Star staff writer Ramona Giwargis can be reached at (209) 385-2477 or firstname.lastname@example.org.