With only three months left in the fiscal year, the Livingston City Council unanimously adopted a balanced 2013-14 budget last week a plan that reflected a steep decline in general fund revenues, an increase in operating costs and flat numbers for city revenues.
Despite reaching concession agreements with employees that included furloughs, pay reductions, limiting vacation cash-outs and requiring employee contributions toward health insurance, the budget shows the city will break even but not achieve a positive financial position.
The general fund revenues are projected at $4.56 million and expenditures are expected to be the same. The anticipated balance is zero dollars, according to the budget documents.
“I would love to have surplus money, but at this point, the goal was just to close the gap,” said City Manager Jose Ramirez, noting the city originally faced a $150,000 shortfall. “You’re not trying to get any more than what’s needed from the (employee) bargaining units. With the budgetary concessions we had, we wanted to get to zero.”
Last year’s revenues were $4.7 million and expenditures were $4.8 million, according to Odi Ortiz, the city’s finance director. General fund revenue declined by about $280,000 in a year, Ortiz said. City leaders attribute the decrease to a drop in property and sales taxes.
The 2013-14 budget shows personnel costs make up almost 64 percent of the city’s expenditures, which amounted to about $2.89 million. Those costs were about $3.1 million in 2012-13.
Services, which include contracts with consultants and city utility costs, are $1.66 million, or 36 percent of the budget. Other city costs have gone up because of inflation and increases in health insurance, worker’s compensation and retirement contributions, Ortiz said.
Livingston Mayor Pro Tem Gurpal Samra said the city has been dipping into its reserves for the last five years.
“We couldn’t dig into reserves anymore, and that’s why we asked for the concessions from the employees, which saved us about $120,000,” Samra said. “If we hadn’t done that, we would have had to come up with that money from somewhere else. After a while, there are no more reserves to get into.
“Unless the budget was balanced and not using reserves, we were not going to pass it,” Samra said.
As of Friday, the city had a negative cash fund of $100,000, but Ortiz said the city will receive its second allocation of taxes in May, which will bring it to a positive $650,000.
The city projects $843,000 in its reserves by the beginning of the new fiscal year, July 1.
“The idea is to balance the budget and protect the low level of reserves we have,” Ortiz said. “We have depleted more from our reserves in the last 10 years.”
The city’s fund balance was also impacted by the removal of a $511,000 loan related to the now-dissolved Redevelopment Agency, reducing the balance from $1.3 million to about $800,000 as of June 30, 2013.
The City Council also looked at a preliminary plan for the city’s 2014-15 fiscal budget. The budget is still in its preliminary stages, but shows the city will begin to see red ink again next year.
If the concession agreements are not extended, the city’s general fund will dip into the red by $80,000. The agreements end on June 30, and that will attribute to an increase to city expenses.
Samra said city officials might consider extending the concession agreements to close the shortfall.
In other business, the council heard a presentation from consultant Catherine Hansford about the new water and sewer rates. City officials also announced three multilanguage public workshops to discuss the rates: April 8 in English, April 10 in Spanish and April 22 in Punjabi. The workshops will begin at 6 p.m. in the City Council Chambers, 1416 C St., Livingston.
Livingston Mayor Rodrigo Espinoza announced he’ll seek re-election in November. Samra, who’s also up for re-election, has not confirmed whether he will run for office.