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Duarte’s Good News of $578,900 Mid-Year Budget Surplus Tempered by Uncertainty Over the Future of former Redevelopment Funds
Monrovia Weekly Mar 08, 2012
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For the first time in several years, the City of Duarte is looking at a substantial budget surplus at mid-year. What was originally projected to be a $134,400 surplus when the 2011/2012 budget was adopted has grown to a surplus of $578,900, increasing the year-end General Fund reserves to $12.5 million, equating to 109% of General Fund expenditures.
The surplus is attributed to many factors such as program reductions, cost savings from recently negotiated union agreements, staff vacancies, higher than expected building permit revenues, lower than expected expenses and several grants.
“It’s been a team effort over the past three years to right the ship and find ways to trim, cut, conserve and live within the new normal of this economy,” said City Manager Darrell George. “A lot of work has been done in the last two years to make fiscally responsible adjustments and this budget reflects the fruits our labor. However, there continues to be a lot of uncertainty over how the city’s finances may be further impacted as a result of decisions yet to be made over former redevelopment funds and that will need to be dealt with in our next budget and probably several budgets thereafter,” said George.
Approximately $7.5 million of the $12.5 million General Fund balance represents a transfer made in February 2011 as a repayment of the City’s loan advance made to the Redevelopment Agency in prior years. In the event that this transfer is deemed invalid, and ordered surrendered to the State, reserves would be reduced to $5 million, which represents 44% of General Fund expenditures. At year end total General Fund expenditures are projected to be $11,439,100, an increase of only $18,000, as compared to the adopted budget. A majority of the General Fund departments are projecting to spend less than their budgeted amounts.
One of the larger reductions in expenses is due to $130,000 in cost savings related to personnel changes and vacancies. Although the City has not implemented any employee layoffs, three staff positions were vacated and left unfilled in the last quarter of 2011. A retirement in March will leave another position temporarily unfilled, reducing the City staff count from 43 to 39. As a result, the City, historically known for its lean, efficient staffing, is down 13 full-time staff over the past three years, from a high of 52 full-time employees.
Other mid-year budget highlights:
Legal expenses are expected to be $71,000 less than originally budgeted.
Supplemental Law Enforcement Safety Funds of $112,000 will be used to offset costs associated with Los Angeles County Sheriff’s contract.
The December windstorm resulted in $88,000 of unanticipated costs to the City for clean-up and repairs.
Building permit fees are projected to increase by $50,000 to a new total of $350,000, due to remodels conducted by Wal-Mart, the soon-to-open new 99 Cent Only Store, and the new Fiat dealership, as well as new construction at Phase two of the Huntington Courts housing development.
Duarte was awarded a $54,000 grant to implement a recycling program for Multi-Family housing.
Duarte’s Promise – The Alliance for Youth has been expanded to include additional Promise Fellows who are funded through the Duarte’s Promise grant and partnering agencies matching grants. As a result, program revenues and expenses will increase in the amount of $45,000.
Reimbursements of approximately $250,000 were received in conjunction with an Energy Efficiency Upgrade of City facilities completed in 2011.
A Cal Recycle Grant of $150,000 that can be used toward street resurfacing when recycled asphalt rubber is used will be used to offset costs related to the Highland Avenue rehabilitation project as well as the Area 1 slurry and cape seal projects.
The City now qualifies for approximately $36,000 in National Transportation Department funding which will partially offset the ongoing increases in fuel and repair costs associated with the free-to-the-public Duarte Transit system.
Duarte City Council members and administrative staff will convene in a budget workshop on April 30th at 4:00 pm to discuss 2012/2013 fiscal year budget. The workshop is open to the public.
For more information about the mid-year budget and upcoming budget workshop, call Duarte City Hall at (626) 357-7931.
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