Treading water. That's about what the City of Escalon is doing to keep from going under.
But, noted interim City Manager Henry Hesling, that's not unlike many California communities struggling to make ends meet, maintaining services while holding the line on costs. In Escalon, a budget approved Monday night included expenditures of roughly $3.2 million and revenues topping out at around $3 million, for a more than $230,000 operating deficit.
Key pieces of the budget picture that helped reduce the deficit from over $450,000 earlier this month include putting a hold on hiring of a fulltime city manager and fulltime police chief at the current time, along with elimination of an engineering tech position.
Also, city offices will be closed one day a month for a citywide furlough day, further reducing expenditures. City council members voted 5-0 in favor of the budget plan at their Monday night, June 21 meeting but Hesling said that is just the first step.
"We're looking to have our financial strategy put together within the next 120 days," Hesling said of mapping out a game plan for the city to make it through the difficult financial times. "Then we will go back and see if we can reduce our deficit.
"It's not over."
Talks with employee groups will continue, the city will re-evaluate the search process for both the city manager and police chief, and will look over the entire city operation. Hesling, as interim city manager and Jim Shaw, as interim police chief, have agreed to continue their contracts with the city through June 30, 2011. Additional reorganization of some positions within city departments is also possible, officials said.
"We will look at how we deliver services and how much it costs," Hesling added of reviewing the overall city operation. "Our revenues are dropping, you have to bring your expenditures down as well."
Hesling said that the revenue projections are very conservative, erring on the side of caution. The city's two largest sources of revenue are its property tax, accounting for just over 50 percent and sales tax, which makes up about 20 percent. Proposed revenue from fiscal year 2010-11 property tax is $1,511,500 and represents a 3 percent increase from last year's adopted budget. Sales tax projections are 25 percent less than a year ago, estimated at $583,000. Other sources of revenue are investment earnings, construction permits and planning fees.
Closing city offices the third Friday of each month will help bring costs down, with the closures taking effect in July. Furlough days scheduled for the rest of the year are July 16, Aug. 20, Sept. 17, Oct. 15, Nov. 19 and two Fridays in December, Dec. 10 and 17.
In addition, holiday closures observed by city offices will be Monday, July 5 for Independence Day; Sept. 6 for Labor Day; Nov. 11 for Veterans' Day; Nov. 25 and 26, closed for Thanksgiving; closed Dec. 24 and 27 for the Christmas holiday; and Dec. 31 for New Years Day.
Hesling said employees took furlough days on a rotating basis this past year, but officials felt it was a more efficient system to shut down all departments at the same time.
The city is expected to start the new fiscal year on July 1 with a general fund reserve balance of $2.5 million. With money being paid out of the reserve for debt service on the Civic Center building and police department construction, the Community Center renovation and to cover the operating deficit in the general fund, that reserve balance is estimated to drop to $1.66 million by June 30, 2011.
But, noted interim City Manager Henry Hesling, that's not unlike many California communities struggling to make ends meet, maintaining services while holding the line on costs. In Escalon, a budget approved Monday night included expenditures of roughly $3.2 million and revenues topping out at around $3 million, for a more than $230,000 operating deficit.
Key pieces of the budget picture that helped reduce the deficit from over $450,000 earlier this month include putting a hold on hiring of a fulltime city manager and fulltime police chief at the current time, along with elimination of an engineering tech position.
Also, city offices will be closed one day a month for a citywide furlough day, further reducing expenditures. City council members voted 5-0 in favor of the budget plan at their Monday night, June 21 meeting but Hesling said that is just the first step.
"We're looking to have our financial strategy put together within the next 120 days," Hesling said of mapping out a game plan for the city to make it through the difficult financial times. "Then we will go back and see if we can reduce our deficit.
"It's not over."
Talks with employee groups will continue, the city will re-evaluate the search process for both the city manager and police chief, and will look over the entire city operation. Hesling, as interim city manager and Jim Shaw, as interim police chief, have agreed to continue their contracts with the city through June 30, 2011. Additional reorganization of some positions within city departments is also possible, officials said.
"We will look at how we deliver services and how much it costs," Hesling added of reviewing the overall city operation. "Our revenues are dropping, you have to bring your expenditures down as well."
Hesling said that the revenue projections are very conservative, erring on the side of caution. The city's two largest sources of revenue are its property tax, accounting for just over 50 percent and sales tax, which makes up about 20 percent. Proposed revenue from fiscal year 2010-11 property tax is $1,511,500 and represents a 3 percent increase from last year's adopted budget. Sales tax projections are 25 percent less than a year ago, estimated at $583,000. Other sources of revenue are investment earnings, construction permits and planning fees.
Closing city offices the third Friday of each month will help bring costs down, with the closures taking effect in July. Furlough days scheduled for the rest of the year are July 16, Aug. 20, Sept. 17, Oct. 15, Nov. 19 and two Fridays in December, Dec. 10 and 17.
In addition, holiday closures observed by city offices will be Monday, July 5 for Independence Day; Sept. 6 for Labor Day; Nov. 11 for Veterans' Day; Nov. 25 and 26, closed for Thanksgiving; closed Dec. 24 and 27 for the Christmas holiday; and Dec. 31 for New Years Day.
Hesling said employees took furlough days on a rotating basis this past year, but officials felt it was a more efficient system to shut down all departments at the same time.
The city is expected to start the new fiscal year on July 1 with a general fund reserve balance of $2.5 million. With money being paid out of the reserve for debt service on the Civic Center building and police department construction, the Community Center renovation and to cover the operating deficit in the general fund, that reserve balance is estimated to drop to $1.66 million by June 30, 2011.
