By Josh Dulaney, Staff Writer
Posted: 01/10/2010 07:44:12 PM PST

FONTANA – The city faces an $8.2 million budget shortfall for fiscal 2010-11.

City Manager Ken Hunt announced the figure at a goal-setting workshop attended by department heads and elected officials on Friday. “Things have changed, things have gotten worse,” Hunt said.

Hunt reminded officials that the city last year closed a $7 million deficit by eliminating some job vacancies, trimming department budgets, offering early retirement incentives and cutting roughly 50 positions.

But the sour economy and state takeaways continue to chew into local budgets, and the city won’t emerge unscathed.

While revenues are at $79 million, the forecast for sales tax revenue has been reduced by $2 million, Hunt said.

The budget gap consists mainly of a $3 million structural deficit, $1.5 million tied up in road improvements and roughly $2.6 million dedicated next year to contractual employee cost adjustments.

Interest adjustments and added service costs are among other factors digging the hole.

“We haven’t settled on how we are going to balance the budget,” Hunt said after the meeting. “It’s going to have to be a combination of (cutting operating expenses), use of reserves and I guess layoffs are a last resort.”

Hunt said he would meet with bargaining groups next week to discuss the cost adjustments.

Despite the down economy, officials remained hopeful that new projects could get off the ground this year as others wrap up.

Mayor Mark Nuaimi touted the Cypress Avenue overcrossing at the 10 Freeway and the Senior Community Center as projects to be completed this year.

He said construction may start this year on the long-anticipated interchange at Duncan Canyon Road and the 15 Freeway, if the state doesn’t reach for local redevelopment funds.

Councilman John Roberts said such unknowns would cause the city to be relatively conservative in the way it budgets this year.

“We haven’t been able to digest what the governor’s budget means to us and how it’s going to play in our budget process,” Roberts said.

Hunt said he would put together a budget strategy to discuss with the City Council and that he hopes officials would implement the strategy as part of the mid-year budget adjustment in February.

“It doesn’t make any sense to wait until June 30 to try and fix the problem,” Hunt said at the workshop. “It (makes sense) to address it sooner than later.”

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