The city of Ceres is over a half-million dollars shy for city operations halfway into the budget year because revenue projections have fallen short. The Ceres City Council got the bad news at Monday's meeting.
Finance Director Sheila Cumberland said revenues are at 44 percent when they should be roughly at 50 percent six months into the 2010-11 budget year. The shortage is due to a number of factors, chief among them that the city failed to factor in reduced interest on bank deposits since the city is spending $1.072 million of its general fund reserves. Mayor Anthony Cannella expressed irritation that nobody caught the budgeting oversight that led to a projection of $140,000 that would not be there.
Sales taxes are about $90,000 short because of reduced sales in the slowed economy. Also down are building and plan check fees by an estimated $153,000.
Cumberland didn't recommend any expenditure reductions to offset the lower revenues saying "there are so many unknowns at this point." But Cannella said something will need to be done.
"Our assumptions are off, which means we'll have to deal with it at some point," said Cannella. "We need to get a handle on this and pretty quick," said the mayor.
Cumberland said the worst-scenario budget picture for next year is that Ceres will have to trim its budget by $3.4 million.
Public Safety Director Art deWerk, who is doubling as the assistant city manager, said the council will need to look at a big picture answer to the budget which will depend on the outcome of negotiations with the city's labor groups. The council will discuss the matter at closed session on Feb. 8.
Cannella, however, wants to see city staff develop another host of budget cuts regardless of the outcome of budget talks.
Approximately 80 percent of the city's General Fund is spent on public safety.
The city is hoping to win concessions from city employees in order to avoid or reduce the level of layoffs.
Last year the city inflicted a series of employees cuts to offset a shrinking budget.
The city is bracing for higher costs associated with the Stanislaus County Employee' Retirement Association actuarials are finished and reveal Ceres will need to pay out more to help cover losses. City Manager Brad Kilger said the added costs will likely not be as high as the projected $1.2 million. What those costs will be - and if they can be feathered over the course of several years - has not been determined.
On Monday the council also received the results of an unqualified audit performed on city finances. The firm of Caporicci & Larsen gave the city a general bill of health when it comes to accounting practices but did offer a number of suggestions on where the city could exercise better control. The auditors said the city recovered from a staffing shortage that threatened the city's ability to handle city finances.
Finance Director Sheila Cumberland said revenues are at 44 percent when they should be roughly at 50 percent six months into the 2010-11 budget year. The shortage is due to a number of factors, chief among them that the city failed to factor in reduced interest on bank deposits since the city is spending $1.072 million of its general fund reserves. Mayor Anthony Cannella expressed irritation that nobody caught the budgeting oversight that led to a projection of $140,000 that would not be there.
Sales taxes are about $90,000 short because of reduced sales in the slowed economy. Also down are building and plan check fees by an estimated $153,000.
Cumberland didn't recommend any expenditure reductions to offset the lower revenues saying "there are so many unknowns at this point." But Cannella said something will need to be done.
"Our assumptions are off, which means we'll have to deal with it at some point," said Cannella. "We need to get a handle on this and pretty quick," said the mayor.
Cumberland said the worst-scenario budget picture for next year is that Ceres will have to trim its budget by $3.4 million.
Public Safety Director Art deWerk, who is doubling as the assistant city manager, said the council will need to look at a big picture answer to the budget which will depend on the outcome of negotiations with the city's labor groups. The council will discuss the matter at closed session on Feb. 8.
Cannella, however, wants to see city staff develop another host of budget cuts regardless of the outcome of budget talks.
Approximately 80 percent of the city's General Fund is spent on public safety.
The city is hoping to win concessions from city employees in order to avoid or reduce the level of layoffs.
Last year the city inflicted a series of employees cuts to offset a shrinking budget.
The city is bracing for higher costs associated with the Stanislaus County Employee' Retirement Association actuarials are finished and reveal Ceres will need to pay out more to help cover losses. City Manager Brad Kilger said the added costs will likely not be as high as the projected $1.2 million. What those costs will be - and if they can be feathered over the course of several years - has not been determined.
On Monday the council also received the results of an unqualified audit performed on city finances. The firm of Caporicci & Larsen gave the city a general bill of health when it comes to accounting practices but did offer a number of suggestions on where the city could exercise better control. The auditors said the city recovered from a staffing shortage that threatened the city's ability to handle city finances.
