Proposed budget precariously balanced but still facing shortfall
June 18, 2010
By Peggy Kelly
Santa Paula City Council
In the wake of layoffs, service cuts and other cost-saving measures Santa Paula is still facing a shortfall, the City Council learned at Tuesday’s special meeting.
Santa Paula City Manager Jaime Fontes and Finance Director John Quinn told the council that in spite of recent cuts and tweaks to eliminate a $1.2 million General Fund gap the future isn’t bright, especially if the state continues money grabs of sorely needed funding.
Although balanced for now, the budget is precarious. And with any more cuts Fontes said the city would be unable to deliver services, as the state’s financial problems “continue to affect us.”
Although retail sales and local home sales seem to be improving and there are other “positive signs that give us hope, be advised the budget may not hold up for more than a few months. “We could be in trouble,” he noted, due to continued state money grabs.
Quinn told the council because of the length of time the department spent on layoff procedures and other issues leading up to the budget preparation, “There hasn’t been a lot of time to build you a document with substance.” All errors - evident throughout the document - will be corrected, Quinn noted.
Cities across the state are in the “middle of triple flip” of money being retained by the state - which now estimates a $19-billion-plus shortfall, a problem Quinn said could linger until up until 2015. The city, he added, has already lost $1.2 million to the state and the General Fund has lost over $2 million in revenues since 2007-2008 when the city was “at our peak.”
Salaries and benefits shrunk from the 2008-2009 budget year to the present $11 million, and there are no salary increases in sight. But the real “culprits” are rising benefit costs and the city’s reserves are at risk.
The overall $46-plus-million budget - which includes the city’s self-supporting enterprise funds for sewer, water and trash services - is going to remain tight, said Quinn. And the Redevelopment Agency is “DOA” due to state grabs that have zeroed out the account set aside for projects such as business development, although funds - about $1.3 million - remain that can only be devoted to low income housing issues. “The city must begin some financial planning,” Quinn said, so it “can handle the increased costs with the resources we see in the future.”
Councilman Dr. Gabino Aguirre noted that although staffing is barebones and benefits low the city pays workers below average.
“In some cases,” said Quinn, “that is debatable,” as although police and fire salaries are low others have be negotiated to a higher level.
Vice Mayor Fred Robinson said the “barebones budget” is “a blueprint for the future based on assumptions,” and the “800-pound gorilla is the state” that could continue to withhold city funds. “We need to hope and pray for an economic upturn,” said Robinson, as the budget is “immensely vulnerable to change, and it could take a dramatic turn for the worse.”
Fontes said if the city’s “revenue streams continue to decline, we will have to take further action.... We cannot rule out more layoffs, reductions in services, or cost increases.”
The council will meet Monday to adopt the budget.
