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State of the City shaky
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The city of Ceres will likely continue slashing expenses and laying off personnel in the coming months, Mayor Anthony Cannella said at Thursday evening's State of the City Address.

The action will become a certainty if the state implements a plan to "borrow" revenues of cities and countywide, said Cannella.

A large crowd gathered at a reception at the Ceres Community Center to hear Cannella go over both the economic woes of the city of Ceres as well as accomplishments in the past year.

Cannella said the economic crisis that has gripped the nation and California have resulted in a general fund decrease of about 10 percent and 17 percent from the 2006-07 fiscal year. Property tax revenues to Ceres city government have been most impacted by an 8 percent drop in assessed value of homes and sales tax revenue is down because of reduced business activity brought on by layoffs and business downsizing. Cannella said the city expects an additional 11 percent decrease is sales tax revenue in the current budget year.

"This has forced us to have to take some fairly painful actions, particularly related to our city personnel since personnel expenses comprise 80 percent of the general fund expenses," said Cannella. "We have had to move quickly and decisively and re-adjust as the financial picture has been a bit of a moving target."

That's an understatement.

Cannella and the council had to cut spending by $3.6 million to reduce general fund spending down from $20 million to $16.4 million. The budget trim included $1.3 million in personnel costs and resulted in 19 city employees being terminated.

"Our work on the budget is not finished yet, however. Given the deterioration of the state's finances and the likelihood that they will be 'borrowing' general fund revenues and possibly taking other city revenues - such as transportation and redevelopment funds - we are beginning the dialogue with our employee labor representatives to cut an additional $1.5 million to more that $2 million from the budget. It is my hope that, despite these painful layoffs, service levels will be maintained. I know our staff and personnel are extremely dedicated and will make every effort to do more with less."

Cannella said the city will be dipping into $5 million in reserves to help "weather the storm." But the council, he said, is disciplined to "not allowing our general fund reserve to dip below 25 percent."

"This reserve will also be used to buffer the city against any potential state raids and any other unforeseen expenses that could occur."

The mayor recounted how expenses were cut, including the elimination of several department heads and mid manager positions to cut overheard and streamline city operations. Cut positions have included: Planning and community development director, Administrative Services Director, Recreation Director, Planning manager and Human resources manager. Those positions have been "backfilled ... with existing city staff who are admittedly being asked to take on greater workloads and responsibilities."

City Manager Brad Kilger has been asked by the council to look into other streamlining measures. The mayor said one task will be to "identify areas within the city organization that are underperforming financially and/or are lacking from a service perspective and recommend steps to correct immediate deficiencies."

Cannella was eager to dispense with the "gloom and doom" to focus on some areas of accomplishment, first noting the building the audience was gathered in.

"Now that we have this new venue the returns to the community I feel are limitless."

He said the 26,000 square feet center is a place for community events, a computer lab, fitness room, arts and crafts room, senior lounge, teen lounge, and meeting rooms. Cannella said the Community Center will serve as a catalyst for the revitalization of downtown Ceres, taking "downtown to the next level."

Formulating an economic development strategy for downtown remains high on Cannella's to-do list.

The mayor mentioned that the city is continuing to expand water sources, including adding old wells and rehabilitating old wells. Cannella said the addition of capacity of over 3,100 gallons per minute to the city water system has "drastically improved the water situation from a couple of years ago when the city had difficulty maintaining pressure when demand rose during the summer. Water pressure has been improved almost 30 percent to an average of 45 to 50 PSI during the recent 100-plus-degree heat. "Many residents, especially in the north side of the city, have commented they have noticed the improvement in water pressure."

The city still plans to participate in the regional surface water plant being constructed by the Turlock Irrigation District. Plans are to build the plant on the Tuolumne River near Fox Grove Fishing Access to deliver up to 6 million gallons of treated water each day to Ceres.

Cannella said he's been talking with Modesto Mayor Jim Ridenour and Councilman Brad Hawn about the possibilities of a regional sewer plant to help Ceres with the treatment of 1 billion gallons of wastewater a year. He said Modesto has a tertiary treatment plant on Jennings Road that converts wastewater to water so clean that a person could safely drink it. He suggested the water could be used on farmland. Engineering would be easy, he said, but "it would be harder to govern."

"We're making headway," said Cannella, who plans to be at the Aug. 3 Modesto City Council meeting.

"There is a political will to make it happen."

Despite economic conditions, Cannella reported that city staff members continue to work with developers of a proposed Mitchell Road Center retail project which includes 300,000 square feet of retail commercial at the northwest corner of Service and Mitchell roads. He said staff expects the project, which is anchored by a Wal-Mart Supercenter, to be in public hearings at the end of the year.

"People are still interested in Ceres and I'm excited about our future," said Cannella.

Work also continues on the West Ceres Specific plan-a master planned development on 960 acres on the west side of Ceres which is proposed to include industrial, commercial and residential development. The plan includes the annexation of the G3 plant which once was the Proctor and Gamble plant, and the Stanislaus County government complex.

Because conventional lending has dried up for many businesses because of the recession, the Ceres Redevelopment Agency has initiated the Hometown Entrepreneur Program (HELP) to help certain businesses get on their feet. The goal of HELP, said Cannella, is to assist small businesses which have shown a commitment to Ceres during the current national credit crisis. The city is also proposing to allocate two loan applications to "special circumstance" applications of established businesses.

"I believe that the majority of businesses will survive the downturn," he said.

Cannella also touted the successes of the Street Crimes Unit formed last year which has to date arrested 122 persons for gang and drug activities. He said he's also proud that the council added two battalion chiefs and three firefighters and has supplied three-man engine companies at Ceres Fire Station #1.

As far as cleaning up Ceres, progress has included adopting an ordinance designed to curb the frequency of scattered grocery carts throughout town. "I've noticed a big difference," said Cannella. The city also dealt with the clean-up of 200 foreclosed properties and participated in the April 25 "Love Much Ceres" community clean-up. About 125 community volunteers and Ceres Christian Church members collected 3.5 tons of debris.