RIVERBANK -- The weak economy continues to eat away at the city's cash flow, and residents will feel the pinch this year. That's the tough news the City Council heard Monday night as it approved the 2009-10 budget.
The city expects a 9 percent revenue drop in its general fund, the money that pays for quality-of-life services such as police, parks and street maintenance. At worst, Riverbank could be forced to lay off two police officers. But those jobs could be saved if the city gets a federal grant this year.
Other cost-cutting already is taking a toll. The city has laid off a public works employee who was in charge of graffiti cleanup, said Finance Director Marisela Hernandez. Residents likely will see slower response times to problems such as clogged sewer lines because a streets employee also was laid off, Hernandez said.
After taking several cost-saving measures, the city expects to spend $7.1 million on general fund expenses this fiscal year, which starts July 1, but expects to take in $6.6 million in revenues. Riverbank will draw on its rainy-day reserves to make up the deficit. The city expects to whittle its savings from $1.1 million to $592,070 by the end of the fiscal year. Reserves will shrink from 15.5 percent to about 9 percent of the city's general fund.
The city's department heads and one employee union have agreed to take one furlough day and forgo cost-of-living raises. Those employees still are eligible for merit-based raises, which are generally about 5 percent, said Hernandez.
The city is seeking similar concessions from its biggest union. If it doesn't agree to the cuts, more layoffs are on the horizon, said City Manager Rich Holmer.
Councilwoman Sandra Benitez raised concerns Monday about the cost of health and retirement benefits for city employees. The city covers the entire cost of those programs; employees pay nothing. Health insurance costs are expected to increase 20 percent this year, Hernandez told the council Monday.
The city must pay those benefits until union contracts expire in 2010, unless the contracts are renegotiated, said Hernandez. Councilman Jesse James White said he wouldn't approve the budget unless the city negotiates cheaper benefits for department heads.
The council approved the budget with a 2-1 vote. Dave White and Benitez voted yes; Jesse James White voted no. Councilman Danny Fielder was absent from Monday's meeting.
In other action, the council:
Moved forward on a proposed sewer rate increase. If approved, monthly residential bills in the city would rise to $23.79 from $20.15. City staff will present the proposed increase at the council's July 13 meeting.
Approved a resolution calling for Riverbank to hold a mayoral election Nov. 3.
Bee staff writer Leslie Albrecht can be reached at firstname.lastname@example.org or 578-2378.