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City budget tighter
Ceres City Hall revenues drop for sixth consecutive year
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The average Ceres resident can probably feel the pain experienced by the city of Ceres faces as it scrambles to come up with a spending plan for the new fiscal year: Continued higher expenses pared with another year of less income to spend.

As the next fiscal year starts in just 26 days, the Ceres City Council is wrestling with hard decisions to craft a budget that includes streamlining the city organization, continuing to pay employees 10 percent than they were earning in 2010 and dipping into reserves to steer away from a structural deficit of $1.76 million.

Acting City Manager Art deWerk said the city is staring at its sixth consecutive year of major revenue shortfalls, four of which led to the use of general fund reserves.

"Since the fiscal year 2007-08 budget year, general fund revenues have not exceeded approximately $15 million per year," said deWerk. "Employee and operating expenses, however, have exceeded revenues each year by substantial margins."

Department heads have requested a total of $16.4 million in general fund expenditures but the city manager and Finance Director Sheila Cumberland are proposing that amount to be scaled back by $287,000. In addition, it's being proposed that the budget is balanced through use of $170,000 in general fund reserves. That still leaves an estimated reserve of 25 percent of the overall budget, a standard which the city always wants to retain.

The vast majority of general fund expenditures are being proposed to be spent on public safety. DeWerk is proposing $12.4 million spent on both police and fire operations, which consumes 76 percent of the general fund. The budget is also looking at scaling back on overtime expenses -- $450,000 in police overtime costs and $300,000 in firefighter overtime -- which are both less than prior years.

Ceres' budget woes are due to a number of factors including a decline in sales and property tax revenues, increased employee retirement costs, the state's grab of redevelopment funds, doubling fuel costs since 2008, and a Community Center that is running $271,000 annually in the red in operations.

Since 2009 the city has eliminated 29 total positions, causing employee workload to increase. In addition, employees will likely continue to forfeit 10 percent of their salaries, a practice that began in 2010. A number of hybrid positions were created to save the city money, most notably having deWerk fulfill the duties as both the public safety director and the acting city manager.

DeWerk said the city would like to make restoration of employee wages and salaries as well as unfreeze salary step increases as a priority in coming years. The city must also address the need to purchase equipment which has been put off because of budget constraints.

"Ultimately I don't feel 100 percent happy in saying we $170,000 of being balanced," said Mayor Chris Vierra. "If we gave back the 10 percent we took from our employees then we're $1.7 million in the hole."

Vierra said he would like to restore the 10 percent cut in the near future but said "we just don't have that money right now." He said he expects "challenging" labor negotiations to follow.

The mayor said the public perception may be that the economy is slowly improving but said local government typically "lags two or three years behind before we see an uptick in revenues."

Vierra was pleased last week to see deWerk initiate a $20,000 budget line item for an executive search for a permanent city manager in the near future. As the city begins to resume more activity in a growing economy, the mayor said it will be impossible for deWerk to handle all of the city's business while overseeing public safety.

The decision to hire a new manager will only happen if the council determines there are both the funds and need.