City Midyear Budget Report Shows Balanced Budget, Slow Recovery

Concerns over the city's midyear budget report had a sobering effect on encouraging news at Tuesday's city council meeting.

After years of sharp decline, Glendora city officials say the city’s budget is on the road to a steady, yet slow recovery.

Since the beginning of the nation’s recession, the city of Glendora has lost $3 million annually. Sales tax revenue dropped 18.5 percent since 2008.

Yet, even with decreasing revenue and rising expenditures, a mid-year budget report by city officials show a negative balance of $26,000 of a $22 million city budget.

“We do foresee that this year we will finish [this year] in the black,” said Betta.

Still, even with a balanced budget, Betta cautioned of provisions missing from the current budget, specifically costs of future compensation for employees and the rebuilding of lost reserve funds.

“The picture is better, more positive going forward, but there are some things we are not making provisions for going forward,” Betta said.

As the city mandated that all city employees pay their full 8 percent of their PERS contribution, Betta projected an annual savings of $862,000 across all funds, and $406,000 in savings from the general fund.

Currently, the city pays the full contribution of retirement for safety employees. The combined city and employee contribution for safety employees is 29.8 percent, according to city records.

But that rate is expected to increase to 39 percent by 2015, an increase in costs Betta said the city must consider.

Also, to continue to cover the costs of capital improvement projects, the city has slowly dipped into general fund reserves, with funds reduced to 41.3 percent since 2005.

“Is it really balanced if we’re eating a bit into our reserves and hoping that the economy gets better fast enough?” Betta said.

Betta called the slow economic recovery and rising expenditures, “weighty issues” the city must address.

City officials suggested adding a 1.5 to 2 percent variance to the budget to help absorb the costs of future expenditures.

“We have to go into the next year with a little cushion, so we aren’t making such drastic action,” said city manager Chris Jeffers.