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Bleak Budget Forecast For City

POSTED March 23, 2011 12:37 a.m.

Oakdale’s city council chambers were at standing room only capacity on Monday night as Oakdale City Manager Steve Hallam painted a gloomy picture of the city’s budget for the 2011-2012 fiscal year. By the time Mayor Pat Paul’s gavel sounded at a few minutes before midnight to close the proceedings, very few of the citizens remained.

Hallam gave an informed presentation of the city’s $22 million budget, explaining the difference between restricted funds – those from specific sources, designated for specific projects – and the city’s general fund that is used for general city services.

With the city facing an $830,000 deficit in its $8 million general fund, Hallam asked department heads to slash 10 percent from their budgets.

“Our service demand has not dropped,” said Hallam, who went on to say that a strategy was to plan and deliver important and discretionary services in ways less dependent on the general fund.

Using pie charts to explain finance percentage divisions, Hallam pointed out that the city’s main source of income for the general fund was property taxes and sales taxes, both of which have dropped over the last few years.

“When the two biggest parts of your pie fall, it significantly hurts you,” Hallam said.

Over the last year home foreclosures and short sales led to as much as a 50 percent drop in some property assessments with Oakdale receiving $77,000 less than last year.

Hallam told the crowd that Stanislaus County is the fourth lowest county in California for getting a percentage of its property tax back from the state. Hallam’s chart showed Stanislaus County receiving only 6 percent of its property tax dollars, where Alameda County receives 20 percent and even San Joaquin County receiving 10 percent.

“If we were a few miles north, we wouldn’t be having this problem,” said Hallam.

Sales taxes have shown a 10 percent per year decline steadily since 2007.

Hallam indicated that city reserves that were at 50 percent of the general fund in 2003, were now only at 17 percent since being used to supplement the budget over the last two years.

“A few years ago we took away the low hanging fruit,” Hallam said. “A couple of years ago we made cuts. Last year we cut to the bone. This year we have to go into the marrow.”

Hallam closed with available options to the council that included additional cuts in services and personnel or transferring additional funds from reserves. He strongly urged that the council consider a temporary sales tax increase.

The idea of a temporary sales tax did not sit well with Mayor Paul.

“Don’t dare ask for a tax increase,” she said. “We need to get our own house in order before we do that.”

Of the cuts proposed by department heads, Police Chief Marty West said he planned to increase traffic enforcement and gain compliance with the city’s dog licensing. By his estimation, his department could make up close to $209,000 in revenue. Even with increases, West said he would still have to lay off one police officer position.

The police department’s budget, which makes up 46 percent of the city’s general fund, has been cut $1.2 million over the last three years, losing over eight police officers and four support personnel.

West said his department has fallen into a “call driven” department with little time for pro-active enforcement and has to rely on outside agencies for some of its services. West noted the department does not have the resources to handle a high-profile incident requiring SWAT or a major investigation.

Fire Chief Mike Botto is in the same predicament and has no budget for apparatus replacement. The fire department is 29 percent of the general fund. With the cuts to his department, staffing for the fire department falls to the levels where the department may not be able to handle a major structure fire or medical emergency.

“It impacts our deployment measures,” said Botto. “If not for our partnerships (with Oakdale Rural Fire Protection District), we could face ‘brown outs’.”

Botto advised the council that with the required cuts, the fire department could not meet the response standards set forth in a 2009 Council Resolution.

All of the citizens that addressed the council emphasized that public safety – police and fire – not be cut. Some pointed out that insurance rates would rise because of the fire department’s rating. Others felt that Oakdale would become attractive to criminals due to a weakened police force.

Mayor Paul suggested that Oakdale look at what the City of Riverbank did by laying off its public works director, H.R. director, and an executive secretary.

Other options offered by council members were increased use of volunteers, turning over some facilities to private entities for operation, and promoting tourism to attract sales tax dollars.

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