The economic slowdown has caused revenues to fall short for the city of Ceres, prompting city fathers last week to dig deeper into reserves.
Despite having to eat away at more reserves, city officials point out that Ceres is in much better shape financially than other cities.
The drop in housing prices has caused property and sales tax revenues to come up shorter than expected when the budget was crafted in June. Administrative Services Director Sarah Ragsdale, who oversees city finances, asked the council to remove $641,212 of expected tax revenues from the budget revenue picture. The city is also anticipating less utility users tax revenue, less building permit revenue, and business license tax revenue.
During the mid-year budget review, the council also added $252,372 in extra spending not previously foreseen. Most of the added spending is due to increases in police salaries and overtime.
"This is a lot deeper than anyone thought," said City Manager Brad Kilger. "But we're going to be fine."
By using reserves until the 2011-12 fiscal year, the city will avoid layoffs.
The city should end up with reserves of $7.65 million, or 37 percent of the annual operating expenditures, at the end of the fiscal year. If the city continues to dip into reserves at the present rate, the city will have a $6.3 million by 2011-12, which is 27 percent of the cost of running the city annually. Kilger said after that the city will be able to replenish the dollars taken from reserves. Not a bad situation, he suggests, since many cities have reserves of less than 20 percent. Kilger said he is committed to never allow the city go below 25 percent.
Revenues will be negatively affected in the economic downturn for probably three to four years, said Kilger, since the Valley is expected to be the last area of the country to recover. Kilger said Ceres is starting to see a weakening in commercial and industrial development.
Kilger noted that he's disappointed that the city will have to pull back on the reins of some personnel projects, such as the purchase of software programs that will enhance worker productivity.
"We will have to think twice as hard now about personnel ... what we can and cannot do," said Kilger. He said that disappoints him since the city outlined an aggressive program for improvements.
Kilger and Ragsdale will be recommending no increases in non-personnel budget items for the 2008-09 fiscal year.
In August the city added $600,284 in extra spending in the budget to increase city salaries to make them more competitive with neighboring similar cities.
Despite having to eat away at more reserves, city officials point out that Ceres is in much better shape financially than other cities.
The drop in housing prices has caused property and sales tax revenues to come up shorter than expected when the budget was crafted in June. Administrative Services Director Sarah Ragsdale, who oversees city finances, asked the council to remove $641,212 of expected tax revenues from the budget revenue picture. The city is also anticipating less utility users tax revenue, less building permit revenue, and business license tax revenue.
During the mid-year budget review, the council also added $252,372 in extra spending not previously foreseen. Most of the added spending is due to increases in police salaries and overtime.
"This is a lot deeper than anyone thought," said City Manager Brad Kilger. "But we're going to be fine."
By using reserves until the 2011-12 fiscal year, the city will avoid layoffs.
The city should end up with reserves of $7.65 million, or 37 percent of the annual operating expenditures, at the end of the fiscal year. If the city continues to dip into reserves at the present rate, the city will have a $6.3 million by 2011-12, which is 27 percent of the cost of running the city annually. Kilger said after that the city will be able to replenish the dollars taken from reserves. Not a bad situation, he suggests, since many cities have reserves of less than 20 percent. Kilger said he is committed to never allow the city go below 25 percent.
Revenues will be negatively affected in the economic downturn for probably three to four years, said Kilger, since the Valley is expected to be the last area of the country to recover. Kilger said Ceres is starting to see a weakening in commercial and industrial development.
Kilger noted that he's disappointed that the city will have to pull back on the reins of some personnel projects, such as the purchase of software programs that will enhance worker productivity.
"We will have to think twice as hard now about personnel ... what we can and cannot do," said Kilger. He said that disappoints him since the city outlined an aggressive program for improvements.
Kilger and Ragsdale will be recommending no increases in non-personnel budget items for the 2008-09 fiscal year.
In August the city added $600,284 in extra spending in the budget to increase city salaries to make them more competitive with neighboring similar cities.
