With the steady loss of tax revenues since 2007, Oakdale has experienced continued economic downturn to where it has been operating at an over $1 million deficit each year.

Oakdale City Manager Bryan Whitemyer presented a mid-year budget report that was no joke to the city council at a special meeting on Monday, April 1.

Whitemyer used charts and graphs to show increasing city revenues from both sales taxes and property taxes that showed monetary growth to a city that was also growing in population from new home construction.

Between 2002 and 2007, Oakdale’s population increased 35 percent, according to Whitemyer, and the city “ramped up” expenditures, adding a fire station, increasing police and fire department staffing, and adding new recreational services. Employee salaries also rose to stay competitive with surrounding cities and retain current workers.

The redevelopment agency was able to provide millions of dollars for blight reduction projects before being shut down by the state in 2011.

In 2007 housing values began to drop and continued to decline. Many homes were foreclosed or sold in short sale. The result was property tax assessments were reset by the county assessor’s office and property tax revenues dropped.

“Homes that had been purchased and assessed for over $600,000 at one time were now valued at half of that, or less,” said Whitemyer.

Whitemyer also said the city had become dependent on property tax revenues and redevelopment funds to provide services. The city did not add any major retail establishments since 2002 and lost opportunities to increase its sales tax dollars.

“We were used to having the highest sales tax revenue per capita in the county,” Whitemyer said of the town that was at 15,000 residents in 2002. “Oakdale has great places to shop, but residents are now spending their dollars elsewhere when they can’t get what they need in town.”

Whitemyer identified Riverbank’s Crossroads Shopping Center as an area of “sales tax leakage” that draws money from Oakdale.

He added that the city’s financial condition has not changed much from when the Fiscal Year 2012-2013 budget was adopted.

“Since 2008, the general fund reserve has been steadily declining as cost reductions have not kept up with revenue decreases,” said Whitemyer, who showed a chart showing that in 2005 the city’s expenditures were less than revenues, but in 2008 the gap showing negatives started.

Whitemyer added that figures appeared to be stabilizing as the country as a whole attempts to rebound from the recession.

“The good news is I think we’ve bottomed out, said Whitemyer.

He predicted the city will end the fiscal year with a general fund balance of about $1.6 million.

Measure O, the Sales Tax Initiative passed in November 2011 is helping the city not fall into a negative balance, but the windfall from that measure ends in March 2015. Measure O brings in approximately $1.25 million per year.

Part of Whitemyer’s presentation to the council included addressing employee vacation and sick leave cash outs, which is a liability of $1.5 million.

Whitemyer asked the council for May and June budget workshops to get citizen input on budget priorities for a preliminary budget with a final budget adopted in September. Annual mid-year reviews will be done in February after the previous year budget had been audited.