Turlock City Council members have long warned that the 2010-2011 budget would be among the most challenging in the city’s history. On Tuesday night, during a special budget workshop, council members and the public learned just how grim the budget situation might be, with an expected $3.0 to $4.3 million general fund deficit.
Given the steady decline in tax revenues, the Turlock City Council is left with only two real resolutions to make ends meet: Increase general fund revenues — an unlikely alternative — or make staff and service level reductions. To bridge the shortfall, between 27 and 38 of the city’s 220 employees paid out of the general fund would have to be dismissed, according to the staff report.
“I think the real question is, ‘Are we going to get serious on this budget or not?’” said Councilman Ted Howze. “… If we continue down this path, the city is going to be insolvent before 2013.”
While Howze admitted that, “nobody here wants to do layoffs,” especially considering that only 43 of the general fund employees are not in the public safety fields, alternatives seem nearly nonexistent.
The city does have a little breathing room in the budget, thanks to a healthy reserve fund projected at $12.2 to $11.8 million on June 30, following repayment of a $4.5 million loan the City of Turlock made to its redevelopment association. The council has previously committed to using $2.5 million of reserves for the coming budget, cutting the deficit to $500 thousand to $1.8 million.
But given the seemingly steady decline in tax revenue, which is not expected to bounce back anytime soon, cuts to bring expenditures in line with revenues may be the “only option left for the council,” in City Manager Roy Wasden’s words.
“We’ve got a great deal of work to do in building this budget,” Wasden said.
At this point in time, the City of Turlock is hoping that general fund revenues stabilize between $26 million and $27 million annually, a figure on par with 2005 funding levels. Spending levels of $30 million plus annually, as has been par for the past three fiscal years, cannot be sustained and will end in insolvency, Wasden said.
“There’s just no reason to believe we’re going to see a significant change in the sales tax base,” Wasden said. “… We’re just hoping we don’t see any further reductions.”
Wasden said consumer spending power has been hard hit by the decline in the housing market as Turlockers can no longer take money out of their homes to finance purchases.
Turlock does have some hopes of increasing its tax base through attracting businesses to town. But despite what Wasden termed “significant interest” among potential businesses, securing financing to open up shop has been difficult for the interested parties.
The City of Turlock plans to do whatever it can to increase the tax base locally and reduce the need for cuts. Wasden said he plans to focus on delivering outstanding customer service to potential new businesses, including potential fee breaks if needed.
The other side of the tax equation requires convincing Turlockers to do business in Turlock, supporting local businesses.
“We need to encourage our friends and family to come to Turlock,” Wasden said.
“This is a great place to shop and do business.”
The City of Turlock would have one alternative to cutting employees, even should tax revenues hold steady. By reopening negotiations with the City unions, possibly working toward restructuring salaries or benefits, Turlock may be able to avoid layoffs.
But a labor agreement prevents the City from requesting changes to the union contracts. According to Wasden, as much as 50 percent of the deficit could be abolished by reworking a few benefit issues which have become, “significant expenses.”
On Tuesday, though, two union representatives expressed a willingness to work with the City to find a mutually agreeable solution.
“We’re realists,” said Mike Cooke, Turlock regulatory affairs manager and representative for the non-public safety managers union. “We realize there’s a new normal in terms of what revenue will be. We have to hit reset.”
Bob Phibbs, counsel for the Turlock City Employees Association, expressed his union’s desire to reopen negotiations with the City in hopes of avoiding layoffs as well.
Regardless of the union negotiations, the Turlock City Council hopes to involve employees in the decision making process during the budgetary cycle. Howze said an employee-generated list of budget saving suggestions was critical to last year’s budget.
Wasden will begin the process with an “all-hands” breakfast meeting this morning, offering oatmeal and ice cream — Wasden’s favorite breakfast — alongside a frank discussion focused on the realities of the 2010-2011 budget. More than 140 employees have signed on to attend the meeting.
The Turlock City Council will continue their budget work at 6 p.m. April 13 in the Yosemite Room of Turlock City Hall, when department heads will provide the first specifics of just what may be cut in next year’s budget. Following that meeting, Howze and Mayor John Lazar — whose relationship has been stressed over a pending lawsuit against former City Manager Tim Kerr — will sit together on an ad hoc budget subcommittee to develop a recommended budget for the entire council to debate.
Members of the audience on Tuesday audibly reacted to the suggestion of putting Howze and Lazar on the sub committee, including Turlocker Cathy Tucker, who addressed the Council with her worry.
“I have concerns with the two people that you have suggested to be on the sub committee,” Tucker said. “There is animosity between them. We all know that.”
Tucker went on to question if Howze and Lazar would be able to work together to draft a budget that is best for the City of Turlock.
For his part, Lazar said that while he may not agree with Howze on everything, the two can work together with their “love/hate” relationship.
Regardless of the relationship between Howze and Lazar, the budgetary issue facing the City of Turlock is very real, and will likely demand significant work from the entire city staff. There are no easy solutions this time, Wasden said.
“There’s no smoke and mirrors here, there’s no hidden fund here,” Wasden said. “The numbers are what the numbers are.”
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.
Given the steady decline in tax revenues, the Turlock City Council is left with only two real resolutions to make ends meet: Increase general fund revenues — an unlikely alternative — or make staff and service level reductions. To bridge the shortfall, between 27 and 38 of the city’s 220 employees paid out of the general fund would have to be dismissed, according to the staff report.
“I think the real question is, ‘Are we going to get serious on this budget or not?’” said Councilman Ted Howze. “… If we continue down this path, the city is going to be insolvent before 2013.”
While Howze admitted that, “nobody here wants to do layoffs,” especially considering that only 43 of the general fund employees are not in the public safety fields, alternatives seem nearly nonexistent.
The city does have a little breathing room in the budget, thanks to a healthy reserve fund projected at $12.2 to $11.8 million on June 30, following repayment of a $4.5 million loan the City of Turlock made to its redevelopment association. The council has previously committed to using $2.5 million of reserves for the coming budget, cutting the deficit to $500 thousand to $1.8 million.
But given the seemingly steady decline in tax revenue, which is not expected to bounce back anytime soon, cuts to bring expenditures in line with revenues may be the “only option left for the council,” in City Manager Roy Wasden’s words.
“We’ve got a great deal of work to do in building this budget,” Wasden said.
At this point in time, the City of Turlock is hoping that general fund revenues stabilize between $26 million and $27 million annually, a figure on par with 2005 funding levels. Spending levels of $30 million plus annually, as has been par for the past three fiscal years, cannot be sustained and will end in insolvency, Wasden said.
“There’s just no reason to believe we’re going to see a significant change in the sales tax base,” Wasden said. “… We’re just hoping we don’t see any further reductions.”
Wasden said consumer spending power has been hard hit by the decline in the housing market as Turlockers can no longer take money out of their homes to finance purchases.
Turlock does have some hopes of increasing its tax base through attracting businesses to town. But despite what Wasden termed “significant interest” among potential businesses, securing financing to open up shop has been difficult for the interested parties.
The City of Turlock plans to do whatever it can to increase the tax base locally and reduce the need for cuts. Wasden said he plans to focus on delivering outstanding customer service to potential new businesses, including potential fee breaks if needed.
The other side of the tax equation requires convincing Turlockers to do business in Turlock, supporting local businesses.
“We need to encourage our friends and family to come to Turlock,” Wasden said.
“This is a great place to shop and do business.”
The City of Turlock would have one alternative to cutting employees, even should tax revenues hold steady. By reopening negotiations with the City unions, possibly working toward restructuring salaries or benefits, Turlock may be able to avoid layoffs.
But a labor agreement prevents the City from requesting changes to the union contracts. According to Wasden, as much as 50 percent of the deficit could be abolished by reworking a few benefit issues which have become, “significant expenses.”
On Tuesday, though, two union representatives expressed a willingness to work with the City to find a mutually agreeable solution.
“We’re realists,” said Mike Cooke, Turlock regulatory affairs manager and representative for the non-public safety managers union. “We realize there’s a new normal in terms of what revenue will be. We have to hit reset.”
Bob Phibbs, counsel for the Turlock City Employees Association, expressed his union’s desire to reopen negotiations with the City in hopes of avoiding layoffs as well.
Regardless of the union negotiations, the Turlock City Council hopes to involve employees in the decision making process during the budgetary cycle. Howze said an employee-generated list of budget saving suggestions was critical to last year’s budget.
Wasden will begin the process with an “all-hands” breakfast meeting this morning, offering oatmeal and ice cream — Wasden’s favorite breakfast — alongside a frank discussion focused on the realities of the 2010-2011 budget. More than 140 employees have signed on to attend the meeting.
The Turlock City Council will continue their budget work at 6 p.m. April 13 in the Yosemite Room of Turlock City Hall, when department heads will provide the first specifics of just what may be cut in next year’s budget. Following that meeting, Howze and Mayor John Lazar — whose relationship has been stressed over a pending lawsuit against former City Manager Tim Kerr — will sit together on an ad hoc budget subcommittee to develop a recommended budget for the entire council to debate.
Members of the audience on Tuesday audibly reacted to the suggestion of putting Howze and Lazar on the sub committee, including Turlocker Cathy Tucker, who addressed the Council with her worry.
“I have concerns with the two people that you have suggested to be on the sub committee,” Tucker said. “There is animosity between them. We all know that.”
Tucker went on to question if Howze and Lazar would be able to work together to draft a budget that is best for the City of Turlock.
For his part, Lazar said that while he may not agree with Howze on everything, the two can work together with their “love/hate” relationship.
Regardless of the relationship between Howze and Lazar, the budgetary issue facing the City of Turlock is very real, and will likely demand significant work from the entire city staff. There are no easy solutions this time, Wasden said.
“There’s no smoke and mirrors here, there’s no hidden fund here,” Wasden said. “The numbers are what the numbers are.”
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.
