Oakdale city officials revealed several options for the 2012-2013 fiscal year budget on Wednesday evening, May 30, at a public workshop in the council chambers.
Over the past few years the condition of the city’s general fund has worsened due to sluggish revenue generation and growth in expenditures, primarily employee costs. Even though the city has reduced its budget spending, it has not been sufficient to offset the shortfalls.
The city’s Sewer Enterprise Revenue bond rating was recently downgraded by Moody’s Investors Service, citing concerns about the city’s lagging economy and uncertainty of future financial performance.
With the city currently in negotiations with two of its labor bargaining units, proposed plans to bolster finances include salary reductions, personnel cutbacks, and having employees pay full portions of pension costs and health benefit expenditures.
Council members expressed an interest in limiting employee vacation and sick leave totals since payouts have cost the city over $1 million since 2008.
Officials acknowledged that some of the proposals would have to be accepted by its unions.
The city will be making its first payment of the waste water treatment plan debt this year and is required to have $855,000 in reserves for the debt in its budget. Officials stated that the revenue from sewer and water billings is not adequate to cover the debt reserve and debt payment.
Another rate increase is possible to assist in revenues for the project.
Interim City Manager Greg Wellman projected that the Measure O Sales Tax initiative that passed last November will bring in $1.2 million for the next three years.
Council members emphasized that the funds would be used for public safety and the senior center as was promised to voters last year.
Other proposals for budget reconciliation included selling city properties and consolidation of management positions.
“I was extremely impressed with the intelligence of the questions of the council and the alternatives they brought up in addition to staff’s recommendations,” said Wellman. “To bring up the reorganization of city operations publicly was a courageous move.”
Wellman also said he saw a lot of “problem solving” among the members.
Officials pointed out that the workshop was the basis for discussions on potential ideas to assist the city as it looks to overcome its financial hardship.
“There was no political posturing,” Wellman said. “There was an attitude of let’s get right at it and get this done.”
“It went really well,” said Mayor Pat Paul. “The staff was honest and brutally blunt. There were no games or pet projects.”
Paul said she was impressed with some of the ideas holding department heads accountable to their individual budgets, having individual department capital improvement funds, and rolling over money from previous year’s budgets to the departments that actually used less than allotted.
The budget and direction for staff to take was on the June 5 agenda for discussion.