The City Council on Monday unanimously adopted a “barely balanced” $40.4 million budget for fiscal year 2014-15 that the city manager characterized as a “status quo” budget.
General fund projections estimate about $11.2 million in revenues and $11.2 million in expenditures with a cash deficit of about $4.1 million, according to a city staff report. It is the second year in a row the council has adopted a balanced budget.
Bill Zenoni, a financial consultant hired last year to oversee the city’s budget, said the budget contained a surplus of just $2,000, however the City Council directed staff to reduce building maintenance spending by an additional $125,000 this year. Still, Mayor Pro Tem Craig Mooneyham, who proposed the maintenance cut, said the cushion is relatively slight.
In his report to the council, City Manager-Police Chief Frank Pietro said the new budget contains “no significant changes in revenues, expenditures or service delivery ...” from the last fiscal year.
On Monday, Pietro told the council to expect an “extremely challenging year” financially.
“In spite of the major accomplishment of presenting a balanced budget, we must aggressively identify measures which might be taken to eliminate the negative fund balance and return the city’s general fund to a fiscally stable position,” Pietro said in his report.
Pietro also said authorities must finds ways to “eventually eliminate” the city’s $4.1 million cash deficit.
The city budgeted a net loss of one full-time and one part-time position. The eliminated positions were already unfilled, Pietro said, and there were no layoffs.
The city eliminated its community services director position, as well as one water systems operator, along with a part-time position in the finance office and another part-time building maintenance worker. Funds from the Measure H public safety sales tax and grant funding from the state allowed the Police Department to add one full-time patrol position. The city also added a part-time community development position.
Since 2008, the city has reduced its total staffing level by 42 percent, going from 134 positions down to 78 positions this year, Zenoni reported.
City leaders expect to spend about $2.3 million in capital improvement projects next year. Those projects include $1 million for water system improvements, $500,000 on sewers, and $300,000 each on traffic and parks and playgrounds. About $100,000 has been set aside for maintenance districts.
Authorities don’t anticipate any significant revenue increases over the next five years, which could be problematic with anticipated cost increases for the city in CalPERS retirements and medical benefits.
Additionally, the city will likely lose tax revenue with the recently announced closure of Mi Pueblo Foods. The grocery chain has confirmed its intent to lay off 91 employees beginning Aug. 31. Zenoni couldn’t say whether the loss of the grocery store had been accounted for in the budget and that issue will likely come up again at the midyear budget review.