A last-minute adjustment was made to the proposed 2013-14 fiscal year budget to continue with citywide graffiti abatement before the spending plan was adopted Monday by the Ceres City Council.
The $52 million city budget comes just in time for the start of the new fiscal year which starts on Monday.
Acting City Manager Art deWerk said the city is facing its sixth consecutive year of major revenue shortfalls for the general fund, four of which led to use of general fund reserves after trimming expenditures. The city is once again dipping into reserves to fill in the funding gap.
The budget numbers changed slightly from the May 29 Study Session. Originally deWerk asked the council to use just $170,000 in general fund reserves. On Monday, however, deWerk asked to borrow an additional $10,000 if the council chooses to search for a permanent city manager this year. Another $50,000 is being borrowed from reserves to help pay continuing the eradication of graffiti in the city. The combined borrowing of the reserves may reach $230,000.
Department heads requested a total of $16.4 million in general fund expenditures but deWerk and Finance Director Sheila Cumberland proposed that amount to be scaled back by $287,000.
The vast majority of general fund expenditures will 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.
DeWerk asked the council to hold off considering a possible thawing of salary steps that were frozen in past years, as well as restoring the 10 percent salary cut initiated in 2010. He suggested waiting until after September to revisit the matter after seeing the revenue picture from the state. It would cost the city $230,000 to unfreeze the salary steps.
"It's unwise to go in there just yet because we don't know what our final outcome is for the current fiscal year," said deWerk.
He also informed the council about a significant shortchanging in the city's share of state gas tax monies. After the city crafted its preliminary budget, the state informed Ceres officials that the gas tax revenue may reduce $200,000.
DeWerk said the state created an additional tax of 3.5 cents on a gallon of gas last November and stated "we're a little puzzled why ... are they still cutting us?"
Ceres' general fund 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.
The council held off on the possible purchases of iPads for councilmembers.
The new budget also calls for a $78,000 line item for a new senior water distribution operator.