Council Dives into Budget Talks at Special Meeting

In the first of about three special budget workshops, the Dixon City Council Tuesday night took a close look at the city’s General Fund – the fund that pays for the majority of the city’s functions – and gave city staff a direction in how to proceed with the budget.

City Finance Director Jeremy Craig led Tuesday night’s discussion by putting forth key components of the 2011-2012 budget and how it relates to the General Fund.

Craig laid out some key budget decisions including:

-       Furloughs to continue in Fiscal Year 2012

-       Continued decrease of total full-time employees

-       Add reserve for infrastructure ($50,000) this year

-       Large PERS (Public Employees Retirement System) in 2012, with a smaller increase thereafter.

-       Continue to budget new technology to increase efficiencies and transparency including a new city web site to be rolled out later this year.

Craig pointed out to the council that the budget assumes a continued weakness in the economy; no new programs; reduction in staffing; seeks personnel cost savings with employee groups; includes one-time revenues only if they are awarded; and one-time expense savings are conservatively estimated.

Craig told the council that the preliminary budget supports 104 full-time employees in 2012, down from about 26 full-time employees in 2008. He also noted that the budget accounts for a 3 percent decline in property taxes in 2012.  Craig said that it would take approximately 24 years for the property taxes to bounce back from levels in 2008, which averaged out to $7,260 per home in 2008, and declined to $4,600 in 2009.

When it comes to the state’s budget, Craig told the council, “It always seems to impact us and not in a good way.”

With the state budget still in limbo, and the possible cuts in RDA funding as well as cuts in the Gas Tax and Community Orientated Policing Services Grant, much of how the state budget will affect Dixon is unknown.

Craig  explained that the 2011-2012 Budget comes with a deficit of $746,480 and a year-end projection of $567,245. A total of about $13 million in estimated revenue and transfers is included in the budget, with a lower amount of $12.4 million projected by year’s end.

The city is implementing some cost containment measures including early retirement, reviewing or freezing employment vacancies and reducing departments through 2012.

The General Fund has seen a 22 percent decrease in revenue since 2007, but is appearing to rise slightly in 2012, Craig said. When it comes to General Fund Expenditures, Public Safety represents 56 percent of General Fund expenditures while public works, accounts for 18 percent; the rest are taken up by the city council, city manager, clerk, human resource, finance and IT.

The City Council took the facts into consideration and used them examine each department including City Council; City Manager; Administrative Services; Human Resources/Risk Management/City Clerk; City Attorney; Economic Development; Community Development; Engineering; Public Works- Park Maintenance; Public Works- Street Maintenance; Recreation; Senior Center; Police/Code Compliance; and Fire.

The council gave direction to the staff to return to the council with ways to reduce expenditures, specifically the number of professional organization groups that the city belongs to and the publications it subscribes to; and how much money it could save by implementing an early retirement service (Public Agency Retirement Services) for city employees classified under miscellaneous (non police or fire) employees.

City budget workshops continue on June 6 and 7 and the council’s chambers, 600 East A Street. The city council is expected to adopt the budget at its June 14 meeting, a day before the state legislature is expected to act on Gov. Jerry Brown's revised budget.

Where does the General Fund get its money?

35 percent – sales tax

21 percent – property tax

25 percent – other revenue

8 percent – transfer

7 percent – charges

3 percent – inter government