Stephen Wall, Staff Writer
Posted: 02/22/2010 04:18:57 PM PST

GRAND TERRACE – The nation’s economy may be starting to rebound, but the city’s budget woes are not over.

The City Council will hold a 4 p.m. workshop today to talk about how to close a $423,000 mid-year budget shortfall in the General Fund.

Spending and revenue projections have changed since the start of the 2009-2010 budget year in July.

Construction permit revenue, sales tax receipts and investment earnings are all down since the budget was adopted.

Most of the budget gap can be closed through unspecified “labor savings” with employees and use of reserves, City Manager Betsy Adams said in a report to the council.

The council also could freeze non-essential spending as a way to close the shortfall, Adams said.

“Everything is on the table,” said Councilman Walt Stanckiewitz said. “It could be pay cuts, furloughs, you name it.”

Stanckiewitz said he is concerned about the city’s dwindling reserves in the General Fund.

During the 1990s, the city transferred $2.6 million from the Redevelopment Agency to the General Fund. That loan has to be paid back, lowering reserves from $3.7 million to $1.1 million, Stanckiewitz said.

“We no longer have that healthy reserve because back in the `90s they were robbing Peter to pay Paul and didn’t bother to tell anybody,” Stanckiewitz said.

To read entire story, click here.