Workshop finds Los Banos budget in good shape

By Corey Pride / cpride@losbanosenterprise.comMay 30, 2013 

City Manager Steve Carrigan expressed optimism at Tuesday's budget study workshop.

He said he believes the groundwork has been laid for the city to see an economic turnaround.

"Sometimes we get so close to stuff we really can't see the bigger picture. My observations in the short time I've been here are a little different," Carrigan said. "I have had a chance to talk to other city managers and we're in a really good place."

Carrigan said other cities are having to make cutbacks but Los Banos, with the help of its labor unions making concessions in the past few years, has managed to get through the worst of the economic downtown.

"We're not cutting services, or eliminating people or positions," he said. "An increase in sales tax would be a big deal. Property taxes are going to take a little while but I'm very optimistic. I'm very encouraged about the future, and when I say future I mean the next 18 months."

The proposed budget for 2013-14 estimates $9.9 million in general fund revenue versus a spending plan of $10.2 million. The difference is made up by general fund reserve money, which at $6.5 million is nearly double the 2008 amount.

Sonya Williams, Los Banos' accounting and budget supervisor, said the reserve has reached such a high amount because city employees agreed to contribute more money to their health benefits than they did prior to 2008. She said money has also been saved through vacant positions that have gone unfilled.

Mayor Mike Villalta asked when the city will see money from the redevelopment agency tax increment. Williams said she does not know because it depends on the debt payment schedule.

Gov. Jerry Brown dissolved RDAs two years ago. The debt incurred by RDAs is paid off by the designated local authority that oversees it, not the city. The tax increment that is generated in what used to be RDA boundaries will be split with several entities, including the city, once the debts are paid.

Villalta said he brought the issue up to highlight how city staff saved Los Banos money.

"Because of our finance department," he said. "They reconciled bills to be paid by the RDA that basically the general fund could have been stuck for."

Although the city plans to ask voters to extend Measure A in November, the general fund will see more police officers and firefighters being paid from it in the next couple years.

In 2009, Measure A was approved with 82 percent of the vote. It allows salaries of police officers and firefighters, which usually come out of the city's general fund, to be paid through the ½-cent sales tax approved in 2004, known as Measure P. It sunsets in 2014.

Williams and Police Chief Gary Brizzee said even if voters extend Measure A, payment of some salaries will have to go back to the general fund because the ½-cent sales tax dollars are rapidly being depleted. Currently six police officers and two firefighters are being paid from Measure A funding.

Projections are that the Measure A funding will decrease to $350,000 for police and $303,000 for firefighters in the next few years.

Overall sales tax is expected to increase by 2 percent in the next year.

Villalta said he expects Los Banos to recovery from the economic downturn it suffered in the past few years.

"I would say just wait. I think we have some good things on the horizon," he said. "As Mr. Carrigan said, there's a lot of cities that aren't in the shape we're in right now."

Enterprise reporter Corey Pride can be reached at (209) 388-6563 or by email at cpride@losbanosenterprise.com

Enterprise reporter Corey Pride can be reached at (209) 388-6563 or by email at cpride@losbanosenterprise.com

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