Interim City Administrator Steve Frazier challenged the City Council on Tuesday during a discussion on the city’s annual budget:
“We need to have bold vision by the council to move the city forward,” Frazier said.
He was talking about how to get the city past an upcoming budget deficit.
City Finance Director Tim Przybyla had just predicted an $870,000 deficit for the coming fiscal year that starts July 1.
Przybyla said the city had faced other deficits the past few years, but “good luck” and good management had allowed the city to squeak by without dipping into its reserves. But that good luck may be harder to come by, he said.
Cuts already have been anticipated, and are reflected in the budget document.
Some other options for saving money, said Frazier, include:
• Identifying positions that can be eliminated, or not filled if those who occupy them now decide to leave or retire.
• Identifying layoffs that can be made.
• Implementing a “soft hiring freeze” by not filling certain budgeted positions.
The other necessity, Frazier said, is to improve the city’s revenue by fostering growth in the city’s economy.
“If we can’t improve our revenue,” Frazier said, we’ll have to cut 20 positions.”
And there are some limits on that, because public safety positions can’t be touched because of council policy, and Parks and Community Department already has taken heavy cuts.
Personnel costs are the city’s biggest expense, Przybyla said. And it is made bigger by the policies of the California Public Employees Retirement System.
Mistakes made by the system’s board have led to increases in the demands the retirement system puts on finances of cities in the state.
Frazier had told the council that at the beginning of his presentation.
“Tulare and Porterville are both facing $1 million deficits,” he said. “Throughout the state, cities are going to have difficulty balancing their budgets.”
And PERS is the big problem for all.
Increasing cash flow from local sales taxes would be good, Frazier said. But it doesn’t happen right away.
The city needs to bring businesses in and help already established businesses expand.
He said three big projects in the works have yet to generate any revenue for the city.
“We know we have Love’s,” he said, referring to a travel center by that name that is planned for the north end of the city on Avenue 17, east of that road’s intersection with the freeway. But work on that project has been under way for several years, and still no dirt has been moved.
He also mentioned a 5,200-home master-planned community that is in the early development stages.
He also noted that the North Fork Casino, in litigation for 12 years, has not progressed to the construction stage.
One problem the city faces was brought up Wednesday night when the council discussed a request by Baltimore Air Coil to have its plant at 15341 Road 28 1/2 connected to the city’s sewer system.
City Engineer Keith Helmuth said he couldn’t recommend that the city allow the connection because the collector lines leading to the city’s sewer treatment plant at 134048 Road 21 1/2 were inadequate to accommodate such expansion of use.
While Helmuth said Baltimore Air Coil probably could be accommodated, any future requests from other industries likely would have to be turned down.
A final hearing on the city’s budget will be held during the council meeting on June 20, Frazier said.