Three members of the Ceres City Council approved the city’s new budget while two were opposed on the basis, suggesting spending cuts need to be made instead of dipping $2 million from reserves.
Mayor Javier Lopez, Vice Mayor Daniel Martinez and Councilwoman Rosalinda Vierra cast the deciding vote against the wishes of Councilmembers James Casey and Cerina Otero.
City of Ceres Finance Director Shannon Esenwein provided a budget recap at its meeting held last week.
The city’s General Fund is expected to receive $27.5 million in revenue but spend $29.5 million, resulting in a $2 million deficit. To cover the shortfall, Esenwein said the city plans to use $2 million in reserves. That leaves the city with a “rainy day” fund of $4.8 million, which is 16.3 percent of the General Fund and below the 18 percent minimum established by prior councils. Esenwein said that at fiscal year’s end, Ceres’ reserves will be a bit lower than the recommended 17 percent from the Government Finance Officers Association (GFOA).
The $2 million budget gap, she said, “reflects growing financial pressures, high pension obligations, insurance, animal services, inflation, and stagnant growth in core revenue streams.”
Esenwein said the city expects modest increases in sales tax, property, tax, business license tax, and transit occupancy tax.
She detailed how the city has increased some salaries to “attract and retain and qualified personnel.”
Ceres resident John Warren criticized the city for raising the police department salaries by five percent per year for the next four successive years while at the same time dipping further into reserves. He said the extra costs will amount to a million extra dollars. “We can’t keep dipping into reserves because they’re going to be gone pretty quick,” said Warren.
City leaders feel the salary increase is needed to recruit and retain officers so they don’t leave for jurisdictions that pay better.
“I think the city needs to take the stance of finding the money or having the money available before they go out and make a purchase, before they promise somebody a salary that they may not be able to keep paying,” added Warren, who feels the employees deserve a raise “but they may be out of a job if the city doesn’t have the money to pay them.”
Councilwoman Rosalinda Vierra answered Warren, saying “although it hurts financially and I hate pulling from the reserves, I think they are the one group of people that I’m willing to go into the reserves for.”
“The city remains committed to long-term fiscal sustainability,” said Esenwein, “and we’ve taken steps, such as adopting new user fee schedules and initiating key studies related to public facility fees and water and sewer rates. No new full time positions are being proposed at this time in the budget reflects 14 unfunded positions across public safety, public works, finance and Community Development.
Otero mentioned how three members refused to allocate council expenses – including medical benefits – and using it for public safety and cited a “lack of transparency” on city staff’s part about how money is being spent. As an example, she said the council was not made aware that ARPA funds were secretly reallocated to re-carpet City Hall and the Finance Department.
“The budget was given to the public three weeks ago; this clearly is not enough time for public engagement,” Otero stated. “I do feel there was a lack of planning. We don’t have an updated strategic plan, and in my opinion, we don’t have any rules, set goals. Currently, we need to prioritize what is urgent and necessary and we also need to ensure that all of our goals involve the public’s vision. It just is not our vision up here. It’s not just city staff vision, but it’s all of us working together as a whole, as a community.”
She suggested a community survey to hear the priorities of residents’ priorities.
Esenwein said since the council last reviewed the budget, the item for legal services was reduced by $100,000 due to ongoing negotiations with the city’s law firm to reduce costs and potentially implement a retainer agreement. Of that savings the city management team created a $5,000 account per each councilmember to spend on community events of their discretion, such as the Crosstown Showdown or Ceres Street Faire or any other event or cause. But at least Otero and Vierra expressed concerns about that concept; Otero saying the council didn’t discuss it much and Vierra saying “if it’s coming from the reserves I don’t want to have anything to do with it.”
The council suggested bringing that aspect of the budget back for discussion.
