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Council approves $49 million budget
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City Council members approved a city budget last week which uses $573,000 in cash reserves which prompted no complaints considering that officials expected a $3.3 million deficit when the 2010-11 budget was forecast in February.

The deficit was whittled away after the city and its six labor groups negotiated to reduce the city's operating expenses in light of shrinking revenues. Salary concessions save the city approximately $750,000 in the new fiscal year which started on July 1.

Mayor Anthony Cannella said he was proud of the $49.3 million spending plan but noted "it's not perfect." He gushed with praise over the spirit of cooperation among city employees which made concessions despite no guarantees that there won't be layoffs.

"I'm proud of six labor groups that represent the city's 189 employees," said Cannella. "We met with all and every one of them offered something up. I'm happy with that ... even though it was a painful process."

Art deWerk, Ceres' police chief who is acting as deputy city manager, credited an ad hoc committee of employees for coming up with ideas that save the city an estimated $800,000 in expenses. In spite of making "a huge dent in the structural deficit," in some cases the committee's suggestions will result in creating more work for members, said deWerk.

Officials also did some budget magic by transferring between funds, saying they are justified based on projects completed and the percentage of personnel costs allocated to projects for which the funding was based. One transfer was $228,000 from the gas tax fund to supplement street maintenance projects.

Even after dipping into reserves to come up with a balanced budget, Cannella said the city still has a 31 percent reserve "which I think is fantastic." He called existing reserves "a good buffer zone" considering the uncertain nature of the state when it comes to raiding local coffers. The council has committed to maintaining a minimum of a 25 percent reserve in place.

At its meeting of July 12, the council is expected to take action to reclassify a number of positions to save money and streamline city operations. The most significant of changes is eliminating the Development Services Department - which encompasses engineering, planning and building - and creating a new Public Works and Engineering Department. The change puts planning and building under one manager. The change eliminates seven positions, including that of the public works director, and creates eight new ones.

"For a lot of cities in the state ... this is bad," said City Manager Brad Kilger who praised the council for its financial decisions. "With the leadership this city has shown, you wouldn't have what you have today. As bad as it is ... you've put us in a better position of dealing with this."

Kilger said the city will look at mid-year budget revisions to tweak the budget for revenue and expenditure changes.

City officials in California are bracing for more revenue grabs to be inflicted by state leaders who once again have failed to produce a budget on time as required by the state Constitution.

The new budget contains six unfunded full-time positions that will not be filled.