The Ceres City Council will take up the matter of crafting a budget for the 2016-17 fiscal year on Monday evening but it's not going to be a pleasant exercise. The city is staring at the prospects of cutting employees and/or services and dipping into its reserves to stave off less drastic measures.
The meeting starts at 6 p.m. on Monday at the Ceres Community Center, 2701 Fourth Street.
At its May 23 meeting the council was one member short and split down the middle over drawing down on reserves from 19 percent to 15 percent. City Manager Toby Wells asked for permission to take city reserves down from 19 percent to 15 percent and that by not doing so the city would likely be forced to lay off employee as 87 percent of the budget is spent on personnel costs. With 83 percent of the General Fund spent on public safety, it's no secret where the cuts may lie. Mayor Chris Vierra and Councilman Ken Lane said they support dipping deeper into the city's rainy day fund while Councilmember Linda Ryno and Vice Mayor Mike Kline remained opposed to a greater draw down. Councilman Bret Durossette was absent.
The council was in reluctant agreement about freezing five police department positions and a series of budget slicing across the board. City Manager Toby Wells offered a budget proposal which had a $658,000 budget deficit. The action takes the sworn force from 51 to 46 to save $500,000. Wells said three of the four detective positions were designated for special assignments, such as the county drug enforcement agency and the Stanislaus County Auto Theft Task Force (StanCATT).
Vice Mayor Kline pointed out that city reserves have consistently been declining since they were at 28 percent three years ago.
When the mayor reminded the council that the alternatives to not dipping into reserves would be laying off employees, Ryno said: "Something has to be done, you can't keep pushing it off every year."
Wells projects ending FY 2015-16 with a reserve of $3.6 million. However, because the City Council last year decided to return to city employees the salary concessions which they forfeited to help the city balance past budgets in the economic downturn, the 2016-17 budget is taking a hit. The budget is also impacted by a $600,000 increase in employee retirement costs. Wells said that his first budget draft consisted of a $3.1 million budget deficit when he was looking at $18.6 million in revenue against $19.2 million in expenditures.
To avert another budget crisis next year, Wells said a five percent change is needed, or a $1 million change in either expenses or revenues "or some combination thereof." The situation will be worse for the 2017-18 fiscal year, Wells opined, because revenues are only expected to increase four percent and employee costs increasing six percent.
Wells is also proposing waiting later before drastic measures are taken. He proposes a "more thorough" mid-year budget review at the second meeting in January to plan a February review of service levels and give pre-budget direction "because obviously we cannot continue to do what we're doing this year and we've got to start making those changes."
He noted that the city doesn't know for sure where the city will end the 2015-16 year but said $100,000 is vital. "That's a fully burdened police officer. To me I would rather make that decision one day later than two days too early."