Chantal M. Lovell, Staff Writer
Posted: 01/04/2011 08:30:43 PM PST
REDLANDS – The City Council voted to fill its $1.3 million deficit in the 2010-11 fiscal year, opting out of layoffs and banking on assumed property- tax revenue.
In a 4-1 vote Tuesday, the council decided to combine cuts to services and supplies, reallocate funds and budget money from expected additional property tax pass-through revenues from the Inland Valley Development Authority to fill the deficit that remained in the current fiscal year.
Councilman Jerry Bean dissented after proposing the council not rely on as much revenue from the unknown amount of property-tax revenue and make up the difference with layoffs.
The council’s solution relied on $477,000 in cuts to services and supplies, $46,000 in reallocations, $183,000 from cutting expenses such as the use of consultants and on using about $630,000 in property-tax revenue it expects to receive based on the valuation of Edison’s Mountainview Power Plant.
Mayor Pete Aguilar said with the information available Tuesday, the method the council chose to fill the deficit was the best.
“We have to operate from the best position and the position of knowledge we know today,” Aguilar said. “Based on what we know today, I think that this would be a preferred strategy and it would still leave $71,000 (from IVDA property tax revenue) as a buffer It would balance this budget. It would leave untouched $1.2 million that would be added to the ending fund balance. I think this is a responsible
City Manager N. Enrique Martinez said that although the decision was a difficult one, the council needed to solve the deficit so it can begin working on the 2011-12 budget.
“Unfortunately, at this juncture, everything (departments and their directors) give up is not something they want to give up,” Martinez said. “It’s sort of like, `do you cut the hand or do you cut the arm?’ We need to put this to rest so we can get started on the (2011-12) budget (Making the cuts is) going to hurt.”
Bean said it was better to err on the side of caution and not expect as much money from the IVDA property tax money, which City Finance Director and Treasurer Tina Kundig said could have delinquencies. The actual revenue amount will not be known until later this month, Kundig said.
“If there’s ever been a time that we should be conservative about our budgeting, this is it,” Bean said. “At a time we have great economic uncertainty and we also have the state requirements looming over us, we certainly should have a little bit of a cushion.”
Bean suggested the council make all the cuts it did, but include $171,000 in layoffs and use less IVDA property tax money to balance the budget. His plan would have left about $240,000 in extra expected property tax revenue to serve as a buffer in the event the city receives less money in that area than expected.
“It just seems to me we have to set an example here that we believe in balanced budgets and we have to do whatever we have to do to move forward,” Bean said.
The council did not budget the entire amount of IVDA money expected, leaving a cushion of about $70,000, Kundig said.
To read entire story, click here.