Sandra Emerson, Staff Writer
Created: 11/23/2010 04:04:40 PM PST
UPLAND – The City Council on Monday approved $1.75 million in transfers and cuts to the city’s 2010-11 operating budget.
Council members approved recommendations from the finance committee to transfer funds from the Redevelopment Agency and gas tax fund as well as make $350,000 in cuts to the general fund.
They also approved a temporary reduction in their reserve policy from 25 percent to 20 percent of the general fund.
“It was an extremely difficult process from the entire staff’s perspective in terms of finding a way to make up some revenues that haven’t been coming in as expected,” said Councilman Brendan Brandt during the council meeting. Brandt is also the chairman of the finance committee.
The council approved the transfer of $716,000 from the redevelopment fund and $684,000 from the gas tax fund to the general fund.
The council also approved a transfer of $1.65 million from the general fund to the self-insurance/risk management fund, which pays for litigation costs and employee retirement benefits.
This is the sixth or seventh cut in the budget over the last two to three years, said City Manger Robb Quincey.
“Which is roughly $7 (million) or $8 million in a $43 million budget,” he said. “We believe we cut out of the general fund or operating budget about 15 (percent) to 18 percent.”
The city’s budget adjustments are a result of several factors, Brandt said.
Those include a decline in sales tax and property tax revenues as well as rock extraction tax revenue, the loss of $6 million to the state, and abnormally high litigation costs.
Over the last five years, the city has spent $5.3 million on court costs, according to city officials.
The city is involved in litigation with the county, medical marijuana cooperatives and the Chronic Cantina.
Despite the transfer, the redevelopment agency fund will still have $500,000 left for new projects beyond what was already approved in the current budget.
However, the transfer from the gas tax fund equates to a 6 percent reduction, leaving some street improvement projects unfunded. There is still $10.7 million budgeted for street improvements.
The city’s Finance Department on Nov. 10 developed three alternatives to be reviewed by the finance and economic development committee.
Two of the alternatives included the transfers, while the third included the elimination of 12 full-time positions.
The committee decided against the layoffs.
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