Balanced budget coming, city of Modesto says

Officials told Modesto's City Council on Wednesday evening that they expect to bring a balanced budget to the council June 22.

City Manager Greg Nyhoff said the city has negotiated some tentative agreements with employee labor groups, which are being asked to make concessions to reduce layoffs. No details of the agreements were disclosed.

Officials continue working on a $386 million budget for the year that starts July 1. Most of the red ink is in the $105.5 million general fund budget that pays for public safety, recreation and other programs at the council's discretion.

The revenues feeding the general fund have fallen from $120.4 million in 2006-07 to a projected $103 million for next year.

Nyhoff said the city will hold on to a $7 million fund reserve, but it will have to make up a $12.4 million shortfall by cutting personnel and other expenses.

Mayor Jim Ridenour has proposed cutting up to 60 positions, including police officers, community service officers, firefighters, and parks and recreation employees. Wednesday evening, he said residents can expect an effective Police Department or Fire Department response to incidents threatening lives or property.

But police will focus less attention on gangs, narcotics enforcement and auto thefts. And the Fire Department may have to send engines from two or three stations to respond to larger incidents, officials said.

Ridenour said the city will monitor the state's efforts to close a $20 billion budget gap and look for more efficient ways to deliver city services.

"We will look at privatizing services when appropriate," the mayor said.

No one from the public spoke at Wednesday's budget hearing.

Annexation approved

In another item, the council voted 6-0 to approve a 32-acre annexation on Kiernan Avenue, which includes a novel agreement for fire service. Councilman Garrad Marsh abstained over questions he might have a conflict-of-interest with growth-related decisions.

The land zoned for business park development, on the south side of Kiernan Avenue, east of Dale Road, will remain in the Salida Fire Protection District. The Salida and Modesto fire departments will jointly serve the area. In addition, the city and special district will split the fire assessment revenue from the property.

The agreement bucks an old trend of fire districts losing revenue to city growth. Without the agreement, the Salida district would shrink by 30 acres and could no longer collect fire assessments from the property.

Councilman Brad Hawn said the agreement with the Salida district should serve as a model for future annexations.

City Planning Manager Patrick Kelly assured the council the annexation did not include housing. The property owners have not submitted development plans.

Rick Mummert of Benchmark Engineering said he was sure the owners intended to conform to the business park zoning, which would allow offices, light manufacturing, research facilities, or restaurants and retail operations serving the business park.

The annexation requires approval from the Local Agency Formation Commission, which could consider the proposal in August.

Bee staff writer Ken Carlson can be reached at or 578-2321.