Mayor

John Murray / / Finance
Department
119 Fox Street
Lemoore  CA 93245
Phone  (559) 924-6707
FAX  (559) 924-9003

Mayor Pro Tem

Mary Hornsby

Councilmembers

John Plourde
Willard Rodarmel
William Siegel /

City of

LEMOORE
California
To: / Lemoore City Council / Item #______
From: / Nancy Cota, Finance Director
Date: / January 27, 2009
Subject: / 2008-2009Mid Year Budget Review & Revisions

Discussion:

After an extensive review of the status of the current year budget, and working with departments reviewing their anticipated needs for the balance of this current year, staff is requesting the following changes be made to the current budget:

Revenues

Staff has reviewed the past six monthsand recommends the following changes based on the City of Lemoore’s year-to-date revenues, current economic changes, and the State’s budget predicament. Overall the General Fund revenues are $390,000 under where we stood last fiscal year at this time. Staff will monitor the revenues for the remainder of this fiscal year very closely. The recommendationsin General Fund Revenues are:

  • Secured Property Taxes (3010) are remaining stable for this fiscal year, however, we have budgeted conservatively, and will monitor closely.
  • Sales and Use Tax (3022) is recommended to be decreased by $50,000 due to the loss of an automobile dealership in Lemoore. Higher gas prices in the beginning of this fiscal yearallowed this reduction to only be $50,000.

Expenditures

Salary and Benefit Recommendations:

There have been several events impacting ongoing salary and benefit budgets citywide. Annual increases to CalPERS health insurance premiums fell short of expectations (only +3.2% instead of the anticipated +10%). The ratified GASE MOU provided for 3% salary increases for all GASE-represented classes retroactive to the beginning of the fiscal year, as well as equity adjustments for several classes beginning January 1, 2009. Additionally, the City took on a greater portion of GASE-employee health insurance premiums (+16.7%). Similarly, unrepresented management employees received 4% salary increases.

One-time savings were realized due to periods of vacancy in several positions throughout the City. Most vacancies were filled after brief periods for recruitment; only the Associate Planner in the Planning Department remains vacant today as does a grant-funded police officer position to be assigned to the Narcotics Task Force. The current state of the local job market suggests that these savings due to vacancies are unlikely to repeat in the short term.

Altogether, staff recommends reducing salary and benefit budgets (per the attached detail) by approximately $12,700 for General fund departments, and $64,000 for enterprise fund departments. Staff is recommending direction for an overall hiring freeze with the exception of grant funded employees such as the Narcotics Officer for which we have already been funded.

Operating Expenses Recommendations:

The recommendation of the City Manageralong with extensive discussions with departments the General Fund expenses will be decreased $94,332. Attached is exhibit A detailing department cost savings.

Staff is being directed to be as conservative as possible with on-going expenses throughout the balance of this fiscal budget. Additionally, staff will now start to anticipate the 2009-10 fiscal year budget preparation; and would like direction to continue producing a balance budget as long as the state of our economy permits.

The end of year General Fund Reserve and Fund balance as of the end of this fiscal year 2008-2009 should be approximately$8,153,000 which is equal to 91% of the annual expenses.

Staff will be prepared to answer specific questions on these recommendations Tuesday evening.

Budget Impact:

The General Fund revenue budget adjustment for this fiscal year decreases by $50,000, the General Fund expenditures decrease by $94,332. The General Fund salaries decrease by $12,692 for a net increaseto the General Fund fund balance of $57,024.

Recommendation:

That the City Council, by motion, approve these budget revisions and recommendations.

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