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Arcadia Budget Worse than Expected
Arcadia Weekly Sep 16, 2009
An updated projection and discussion of the 2009-2010 fiscal year budget presented to the Mayor and City Council at the meeting on September 15 showed that the city budget was worse off than expected, some council members say.
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Facing $400K Deficit, Council Looks at Options for Further Cuts
An updated projection and discussion of the 2009-2010 fiscal year budget presented to the Mayor and City Council at the meeting on September 15 showed that the city budget was worse off than expected, some council members say.
Part of the budget problem was due to the decrease of some revenue sources, including the sales tax, transient occupancy tax, building permits and plan check fees.
Though the staff originally reported that the sales tax decreased by about 9.8 percent between January and March, the report for the April through June sales tax showed an additional drop to 15 percent, with a drop of about 20 percent countywide.
“We’re not suffering as much most cities but that’s a huge drop,” said Councilman Bob Harbicht. “If this continues we will be about a million dollars out of balance.”
The deficit is lower than Arcadia has seen in recent years, Penman said.
According to Harbicht, the financial report came as a shock to the council.
“We have worked very hard to get our budget balanced so this was totally unexpected,” he said. “That’s something we’re going to be reviewing approximately a month from now and take some actions.”
The council asked the staff to come up with a plan to close the gap and review alternatives, which they will review at a study session at the second meeting in October.
The city hopes the adjustment of fees recently passed will address some of the problem.
There are currently 14 frozen positions in the budget and an additional three full-time positions may be frozen for cost saving purposes, according to city minutes.
One of the suggestions by Councilmember Roger Chandler was to find out how much would be saved if every employee was given a leave of absence for one day.
“Not that that’s something we re necessarily going to do, that but it’s something we’re going to look at,” Harbicht said.
The report, presented by the city manager and administrative services director, showed that at the end of the 2008-2009 fiscal year, the city of Arcadia saw a general fund balance of 4.5 million, but a deficit of more than $400,000 from the reserve fund.
However, the city used less than the $500,000 council had originally authorized to be used from the reserve fund despite a dismal economic state last year, said city manager Don Penman.
By Sameea Kamal
