Valley News -

By Tony Ault
Staff Writer 

Hemet City Council mulls needed cuts to balance the fiscal year 2019-2020 city budget and maintain current reserves

 

Last updated 6/21/2019 at 3:44am

Tony Ault photo

Hemet finance director, Lorena Rocha, answers the city council's questions about the city's preliminary 2019-2020 fiscal year balanced budget at the June 11 council budget workshop.

The updated preliminary fiscal year 2019-2020 Hemet city budget presented at the June 11 Hemet City Council would be a desired "balanced budget" but only if some costs are reduced in departments and the Measure U $1.2 million balance is transferred into the general fund.

The latest preliminary budget presented by Hemet Interim City Manager Lorena Rocha, the city finance director, was well-received by the council but offered some changes that would help solve an anticipated $5.2 million deficit faced by the city. Deficits in the Hemet budget since the Great Recession have plagued the city until some hope came through the passage of the Measure U sales tax. The city council, however, resolved that the general tax should only be used for critical public safety improvements. When more Measure U tax money came in than expected, the balance was set aside in a reserve.

The Measure U revenues have exceeded the city's expectations for the past two years, leaving a $1.2 million balance. The council in fiscal year 2018-2019 budget kept the balance in reserve because of the public's outcry, even though the city's general fund with some cuts still looked at another deficit.

This year, the Measure U Oversight Committee, in a letter to the council that was read at the meeting, agreed that the need for a balanced budget this fiscal year warranted the city placing the measure's balance into the general fund on the condition it would still be used to offset necessary pension and retirement costs for fire and police personnel. That money, if the council approves, will help reduce the anticipated $5.2 million deficit the staff reported.

The 284-page preliminary general fund budget for 2019-2020 fiscal year, as presented, would be balanced if all recommended cuts are approved. The general fund revenues for this year, less the anticipated $11.2 million Measure U funds, shows $41,578,758, while the expenditures or "uses" would total $41,561,031. Less Measure U planned expenditures and with a few possible adjustments upward, the budget would be a few dollars close to balanced.

The general fund budget does not include other set-aside city revenues, or non-general fund expenditures, and the estimated $20 million reserve fund. The 2019-2020 preliminary budget as presented by city staff holds to the city council's May 29 budget workshop decision not to take any of the reserve money to help balance this fiscal year's budget.

The city's overall revenue stream from all sources to be used for the general fund and non-general fund expenses are shown in the preliminary budget and are estimated at $92,616,230. That revenue figure is slightly down from the actual 2018-2019 revenue stream of $94,616,230. The change was seen as due to a slightly slowing economy, Rocha said.

"People are being more careful with their money this year," Rocha said.

Following the council's earlier desire to balance this year's budget, the staff came up with other recommendations, besides using the Measure U fund balance, to meet that request.

They include eliminating five requested positions in public works, engineering and human relations, consolidating other positions and reducing some annual facility maintenance.

Their suggestions also include taking out $895,000 from primarily the police and fire department equipment replacement funds and taking a leftover balance of $315,000 in the facilities maintenance fund and $500,000 in the workers' compensation fund and the $200,000 set aside in the liability fund.

Lopez said even though the police department has 19 vacancies normally paid through the general fund, only 10 of those vacancies are expected to be filled this fiscal year with regular officer retirements or transfers. Those ongoing salary and compensation costs would be reduced as well.

"We are really up against a battle for getting that number and those boots on the ground," Lopez said. "By using the $1.2 million in Measure U balance funds to offset costs in the general fund we will be able to offset the (future) police and fire pension funds."

The council had little to say after hearing the preliminary budget presentation, many of their questions being answered.

Councilwoman Karlee Meyers said the preliminary budget will send a message to the public that the council, "By not using the reserves this year is serious about cutting our costs," Meyers said. "It's painful."

She said the city has to look out for the future generations in its decisions, while knowing that life can change quickly.

Lopez said he told city staff he was not proud of the preliminary budget and realized it would affect city departments by not filling needed positions and creating more work for current employees.

"That is a challenge for us," Lopez said.

Councilman Michael Perciful said to Lopez, "I know there was some heartburn for this," but that the council has to balance the budget this year.

A final vote on the city's 2019-2020 fiscal year budget will likely come at the next city council meeting following a public hearing that will be scheduled for June 25.

Tony Ault can be reached by email at [email protected]

 

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