The city of Ceres has adopted an interim budget crafted with the expectation that the state's budget - always delayed - will potentially raid city coffers.
City Manager Brad Kilger said the biggest unknown in formulating the city budget is a potential take of funds by the state.
Kilger said the city has tried to develop a two-year cushion to deal with potential raidings. He said most cities are using reserves to get by this year in light of falling sales tax revenues.
In April the City Council agreed to dig deeper into reserves because of the economic slowdown caused by the housing default problem in the area.
The drop in housing prices has caused property and sales tax revenues to come up shorter than expected. Administrative Services Director Sarah Ragsdale, who oversees city finances, asked the council to remove $641,212 of expected tax revenues from the budget revenue picture. The city is also anticipating less utility users tax revenue, less building permit revenue, and business license tax revenue.
The interim city budget expects $36,026,416 in revenues and $38,648,191 in spending. The $2.15 million deficit is being made up by city reserves.
Within the budget, the general fund is expected to receive $16.4 million in revenue and spend $18.6 million.
During the mid-year budget review, the council also added $252,372 in extra spending not previously foreseen. Most of the added spending is due to increases in police salaries and overtime.
By using reserves until the 2011-12 fiscal year, the city will avoid layoffs.
The city should end up with reserves of $7.65 million, or 37 percent of the annual operating expenditures, at the end of the fiscal year. If the city continues to dip into reserves at the present rate, the city will have a $6.3 million by 2011-12, which is 27 percent of the city's annual cost.
Kilger said after that the city will be able to replenish the dollars taken from reserves. Not a bad situation, he suggests, since many cities have reserves of less than 20 percent. Kilger said he is committed to never allow the city go below 25 percent.
Revenues will be negatively affected in the economic downturn for probably three to four years, said Kilger, since the Valley is expected to be the last area of the country to recover. Kilger said Ceres is starting to see a weakening in commercial and industrial development.
City Manager Brad Kilger said the biggest unknown in formulating the city budget is a potential take of funds by the state.
Kilger said the city has tried to develop a two-year cushion to deal with potential raidings. He said most cities are using reserves to get by this year in light of falling sales tax revenues.
In April the City Council agreed to dig deeper into reserves because of the economic slowdown caused by the housing default problem in the area.
The drop in housing prices has caused property and sales tax revenues to come up shorter than expected. Administrative Services Director Sarah Ragsdale, who oversees city finances, asked the council to remove $641,212 of expected tax revenues from the budget revenue picture. The city is also anticipating less utility users tax revenue, less building permit revenue, and business license tax revenue.
The interim city budget expects $36,026,416 in revenues and $38,648,191 in spending. The $2.15 million deficit is being made up by city reserves.
Within the budget, the general fund is expected to receive $16.4 million in revenue and spend $18.6 million.
During the mid-year budget review, the council also added $252,372 in extra spending not previously foreseen. Most of the added spending is due to increases in police salaries and overtime.
By using reserves until the 2011-12 fiscal year, the city will avoid layoffs.
The city should end up with reserves of $7.65 million, or 37 percent of the annual operating expenditures, at the end of the fiscal year. If the city continues to dip into reserves at the present rate, the city will have a $6.3 million by 2011-12, which is 27 percent of the city's annual cost.
Kilger said after that the city will be able to replenish the dollars taken from reserves. Not a bad situation, he suggests, since many cities have reserves of less than 20 percent. Kilger said he is committed to never allow the city go below 25 percent.
Revenues will be negatively affected in the economic downturn for probably three to four years, said Kilger, since the Valley is expected to be the last area of the country to recover. Kilger said Ceres is starting to see a weakening in commercial and industrial development.
