The Ceres City Council received a briefing on the budget for the 2020-21 fiscal year budget on Monday evening but held off on adopting it because of the uncertainty of sales tax revenues expected to decline because of the recent economic shutdown.
The city could realize a $680,000 drop in sales tax revenue because of many retailers closing during the coronavirus pandemic.
In his first budget presentation since becoming city manager, Tom Westbrook detailed how he expects to close out the current budget cycle with a General Fund reserve of $5.66 million. The beginning balance on July 1 could be more because of salary savings and frozen positions. The council would than end up with a reserve of 13.6 percent. Because the city has not filled some positions through the current fiscal year, the city is expected to save $780,000, leaving the city with a $6.4 million reserve, or 22.8 percent.
Westbrook noted that the General Fund budget projects $23.6 million in revenues and $24.7 in expenditures, tapping into $900,000 into reserves.
Of the 21 vacant or frozen positions, which would cost $3 million if filled.
Westbrook is also recommending delaying the first payment to the sewer fund which were borrowed to purchased new fire apparatus. Delaying the $304,000 payment for a year would cost $9,000 in interest.
Vice Mayor Linda Ryno said she maintains a strict policy of not spending more than the city brings in.
“It took us years to where we were not spending more than we brought in,” said Ryno. “Personally you can’t keep taking money of your savings to cover your everyday expenses so you need to set yourself up to live within your budget.”
Councilman Bret Durossette asked about revenues from Kase Manufacturing and other cannabis facilities which will be lower than in past years. Last year those revenues were $2.09 million and now they will drop to an estimated $1.38 million.
Westbrook said the city won’t have a good idea of how big of a hit sales tax revenues will be until late August. The cities may be able to make up some of that shortfall through the federal CARES Act which gave Stanislaus County was granted $96 million, of which $15 million may be allocated to its nine cities including Ceres. The city could expect to receive millions.
Ryno said the city could adopt a continuing resolution and revisit the budget in September or October.
In April the City Council committed itself to filling one vacant emergency dispatcher.
Vacant positions include two firefighters, deputy finance director, human resources analyst, custodian, code enforcement secretary, water resource analyst, fleet mechanic, wastewater treatment plant operator, and two parks maintenance workers.
In April Ryno wanted to hold off on filling positions for fear that layoff would have to be issued if the city cannot find the money. Councilman Channce Condit agreed.