An expected influx of $1.7 million in new cannabis operation revenues for the next budget year resulted in unexpected stress on the Ceres City Council during Tuesday’s budget session as members wrestled with where to precisely increase services that have been in the lean mode for years.
City Manager Toby Wells guided the council through a snapshot of the draft 2018-19 budget which begins on July 1. It forecasts increased revenues, mostly due to an increase in sales taxes in a more robust economy and a windfall from three cannabis operations. He sought the council’s direction for priorities in beefing up services.
“It was refreshing to have a conversation where we actually have a little bit of cushion,” said Wells. “That has not been the case in most budgets.”
Wells said the city will start the new fiscal year with $3.8 million in reserves. Projected General Fund revenues are at $20.2 million with expenditures at $19.8 million with $4.2 million left over on June 30, 2019. The reserve is projected to be 21 percent of revenues rather than the 18 percent today.
Wells said sales tax revenue is forecast to be $900,000 higher than FY 2017-18.
Cannabis revenues now represent eight percent of the General Fund, following behind property tax (12 percent), motor vehicle taxes (18 percent), and sales tax (30 percent).
While the city finishes the budget year better than expected, Wells said “there’s still some pretty significant needs across our organization – every department has needs that haven’t been addressed in the last, really, 10 years.”
The city’s employee costs are also rising because of salaries, retirement and a $237,000 hike in health insurance costs.
Wells gave a perspective on the leanness of the city operation, noting that 182 full-time employees are budgeted. In 2008 the city had 202 employees.
“Most folks don’t recognize this but we are a really lean city,” said Wells. He cited the statewide average of 479 cities having one employee per 101 residents while Ceres has one per 232 residents – about half.
Despite the additional revenues, the council held back on authorizing new positions pending an analysis of restructuring the fire department.
On May 17 the city lost recreation manager Traci Farris and Wells recommended replacing her as “absolutely critical.” Fully burdened the position costs the city approximately $145,000.
“That need is dire. As someone who’s worked for our city for 15 plus years she takes a lot of institutional knowledge with her and the pure 40 plus hours a week that she worked, we’ve got to replace that somehow.”
Wells also recommended spending $25,000 to change the recreation coordinator from a part-time to a full-time position.
The council put both Wells’ recommendations on hold.
“Maybe we need to try to restructure some of this,” said Councilman Bret Durossette. “Is it possible to have a part-time person for this?”
Wells said the city’s aquatics program would be “the first to go” if Farris’ vacancy is not filled.
“We cannot carry out the same level of programming with less bodies – it’s that simple,” said Wells.
He hinted that without a replacement, other programs like the Christmas and Halloween festivals may be in jeopardy.
Wells reviewed the need for an additional code enforcement staff, saying that a city the size of Ceres should have four instead of the current equivalent of two full-time employees. Last year changed a code enforcement supervisor to code enforcement officer. The new officer, Roger Alvarez, has been in place for about three months now.
Wells offered the idea of adding a street division support worker who could split time between street cleanup and help in code enforcement cleanups, a concept which Lane liked.
“I think we need additional staff,” agreed Mayor Vierra.
The full cost of a code enforcement officer is approximately $97,000.
Most of the budget discussion focused on how to strengthen police services, as well as make the fire department more efficient. Wells suggested adding more police officers and Councilwoman Ryno expressed interest in reviving a version of the Street Crimes Unit. She mentioned a rumor that a biker gang is trying to take a stronghold in Ceres, and has frequented a Ceres bar to announce “it was their bar.” Chief Smith said the gang Ryno was referring to is trying to establish itself countywide.
Chief Smith said that before it was abandoned about three years ago, the former Street Crimes Unit had four officers assigned to it and suggested the city should work toward five new officers to start it back up. In 2014 Ceres Police had seven of its vacant police officer positions frozen which prevents his department from being proactive.
Wells said it would be difficult for the city to add five officers in one year and Ryno agreed.
As proposed, the draft budget calls for nine sergeants, 24 patrol officers and detectives. A fourth officer has been budgeted to become the fourth School Resource Officer whose salary is funded 80 percent by the Ceres Unified School District.
Police Chief Brent Smith said that despite the money, it’s difficult for Valley police agencies to hiring police officers. Many smaller cities like Ceres are losing officers to departments that offer higher salaries in more desirable locations. Smith said he is currently trying to fill three police officer vacancies.
This year, the city began offering to pay recruits to go through the local police academy. Wells said the seven applicants were “nothing to write home about.”
Wells said the city could try offering bonuses, something which has not made a big difference in Turlock, which Wells said is down 20 officers. Smith, however, said he wouldn’t support giving bonuses to new officers since existing officers haven’t any pay increases since 2010.
Smith said more officers would help keep up with gang activity, crimes involving the homeless and increased crimes from cannabis use including DUIs. Mayor Vierra said he, too, wants a new unit to deal with those problems.
“As soon as the grow season hits, by the end of summer, I’m telling you, we’re going to have to deal with it,” said Chief Smith of marijuana related crimes. “It’s just a burden on patrol officers that are already taxed.”
He recommended unfreezing some of the frozen officer positions.
The city has been making due in shift coverage through the use of overtime. Police overtime is expected to cost the city $415,000 in the new budget cycle. Wells said overtime for public safety is inevitable with injuries, sickness and family leave.
“Bring back something that increases the (police) numbers,” Vierra instructed Wells.
The night grew tense when Wells recommended restructuring the fire department, including the continual freezing of the fire chief position and reclassifying two fire engineers who resigned as firefighters to save $75,000 in savings.
The city has budgeted 31 full-time employees in the fire department, including a fire chief, three battalion chiefs, 12 captains, 12 engineers and three firefighters.
Wells prompted a discussion of restructuring fire under two options, including:
• Establishing three-man engine companies at Ceres’ three open fire stations, which requires two additional positions which could be largely funded if a fire chief is not hired;
• Creating a four-man engine company at two stations – Wells does not recommend it – by pulling Ceres out of the Pecos station serving north Ceres and the South Ninth Street corridor of south Modesto.
“Simply put, four stations is better than three,” offered Wells. “Three stations is better than two if we can afford it. We need to be providing the community the highest level of service we possibly can afford and three stations for a city of 47,000 plus a service area outside of that of at least 13,000 … to go to two stations with eight people is a definite stretch.”
Reorganizing to go to four-man engine companies at two stations would result in a savings of $175,000 annually, said Wells.
It costs the city of Ceres $1 million each year to run the former Industrial Fire Station on Pecos Avenue with $200,000 in reimbursements from that district.
Finance Director Suzanne Dean noted that the change would require “significant demotions … but we actually have to hire one more person in order to have the 28 bodies that we would need to achieve the 4/0 staffing – and that excludes the BCs and fire chief.”
Two additional firefighters would be needed, said Dean, if the city pursues Gthree-man engine companies at the three stations.
None of the budget scenarios call for the re-opening of Ceres Fire Station on Service Road.
Vierra said he wants to see the numbers crunched for the two-station scenario before making “an educated decision.” He acknowledged that while fire personnel have offered to forego raises to keep bodies, he dislikes that option. Negotiations have not taken place yet.
Wells pressed the council for an answer on whether he had permission to fill the two vacant fire positions to reduce overtime costs, which prompted a testy response from Mayor Vierra, who snapped: “You’re not listening to anything that we’re telling you!” When Wells affirmed he was listening, Vierra retorted, “No you’re not!”
“So you’re saying I can’t hire any positions?” Wells asked.
“Right now that’s what you’ve heard, yes,” said Vierra. “Don’t keep pushing the issue, okay? You’ve heard it from a number of us. We want to see the numbers before we make a decision. You’re testing my patience.”
Talk of a 4/0 scenario prompted vocal protests of the fire personnel in the audience.
Mike Miller, president of the Ceres Firefighters Association, accused the council of beefing up the recreation services while “decreasing our abilities” and that he would never “support two stations in this town.”
Vice Mayor Mike Kline said he was offended at Miller’s charge and explained the council is only asking to see numbers.
Ceres Fire Captain Joe Spani said having two stations with four-man engine companies is a pipedream given that illnesses, injuries and family leave occur.
Rebecca Harrington vowed to fight the closure of the Pecos Fire Station, saying her area has the greatest need for fire and first-responder services. After the meeting Wells said it’s likely that without Ceres, the old Industrial station would like be taken by Stanislaus Consolidated or be served by existing Modesto City Fire stations.
Ceres Fire Department responded to 6,098 calls in 2017.
The council gave considerable talk about strengthening the parks and grounds department, which Wells said was most impacted by the recent recession.
During 2006-07 year, the city had 11 ½ full-time employees and now has four to take care of 150 acres in 13 parks.
“The community has expressed concerns about park maintenance so what’s included in the draft budget right now is $150,000 for temp staffing to meet immediate need … to get the mowing up to speed.”
Councilwoman Linda Ryno felt it would be better to hire a parks employee at a fully burdened $82,000 and “forget about the temporary.”
“I don’t think it’s enough, honestly,” said Councilman Ken Lane. “I think it’s real important to have parks maintained in a proper way. Now we’ve got weeds growing all through the sidewalks because the guys can’t get to them.”
Lane said he felt the city needed to increase parks maintenance staffing at an estimated $220,000.
“We need to do something,” said Lane. “Them parks are a mess. It’s embarrassing. Absolutely embarrassing. It’s nothing reflecting on our guys at all … they need some help.”
Mayor Chris Vierra agreed, saying one or two extra parks people are needed.
The budget discussion touched briefly on the Ceres Downtown Revitalization Area Board, which collects assessments from downtown businesses. The budget remains the same except for a one-year $10,000 allocation to beef up security through the city’s existing Ontel Security contract. Maintenance of all the new landscaping will be taking up more of the CDRAB budget, said Wells.
The council was in agreement to keep the city’s minimum general fund reserve at 18 percent or higher.
The budget will be taken up again in late June in time for adoption before the new fiscal year starts on July 1.