City happy with budget position

CITY HALL — On the same day the governor predicted billions in additional state budget deficits, city officials said the city’s $164.8-million General Fund budget is on track.

Approved by the City Council in June after weeks of discussions, the $164.8-million budget included department-wide cuts of at least 5%, wage concessions, the elimination or downgrading of about 30 positions and a restructuring of the way the city pays for street and capital improvements to balance a $9.7-million gap.

During an update on the budget at Tuesday’s City Council meeting, council members were also notified of a more than $4-million surplus left over from last fiscal year’s General Fund budget.

City officials attributed last year’s surplus to a slew of midyear budget reductions, including a citywide hiring freeze, which is ongoing.

“We came in midyear and had to make a lot of adjustments,” said City Manager Jim Starbird, who lauded the council for approving difficult budget cuts.

About $1.7 million of the surplus will be set aside in anticipation of future rate increases for contributions to the state’s city employee pension system, while the rest of the funds will be used to bolster the city’s reserves.

As of Sept. 30, the city’s General Fund had received $25.8 million in revenue — which represents a more than 2% increase on the ratio of projected funds received at the same time last year, according to a city report.

General Fund expenditures are also running as expected, other than a $550,000 appropriation of funds in October to use for Station fire recovery and mudslide prevention efforts. City officials project additional costs associated to the fire could continue to arise during the next few years.

The council also approved a handful of minor adjustments to the budget, including the purchase of a $15,067 piece of equipment that failed during the Station fire.

While sales tax revenues and city investments are down as projected, city officials were optimistic about the financial outlook.

“We are doing the best we can in a dreary situation,” City Treasurer Ron Borucki said during a briefing on the city’s investment portfolio.

Meanwhile, at a Tuesday news conference, Gov. Schwarzenegger warned of additional across-the-board budget cuts as state lawmakers continue to wrangle with the state’s growing budget deficit.

In recent months, city officials have been vocal against state grabs of local dollars, including borrowing cities’ property tax revenues and taking away redevelopment dollars.

In light of the unstable financial situation, Mayor Frank Quintero said it is important for the city to continue to save funds wherever possible.

“At this point we are pretty much on track, but we obviously are continuing to look for areas where we can cut costs,” Quintero said. “Hopefully there will be an increase in revenue, but it’s just important we continue to cut costs because I think we are going to have a slow economy for a few years.”