Atascadero plans to cut $300,000 in city spending over the next two years by eliminating employees’ cost-of-living raises and continuing its hiring freeze. Five vacant positions were also axed.
The City Council unanimously adopted the 2011-13 budget Tuesday. The new fiscal year starts July 1.
The projection for general fund revenue is about $15.7 million in 2011-12 and $16.1 million in 2012-13, while expected spending exceeds that by about $2 million in total.
The council authorized covering that gap with reserves while property and sales tax revenues continue to slide.
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Further details on employee cuts are still in the works because officials are negotiating with employee groups. Contracts are slated to be finalized this month.
As officials put off paying to fix them, deteriorating roads and city buildings may be some of the most noticeable consequences of the cuts.
Atascadero also stopped televising Planning Commission meetings, except for sessions with big issues, among other less noticeable cuts.
Reserve spending is nearly half of what Atascadero projected in late December because staff spent the past six months cutting spending from various areas to bring the gap down from $3.55 million $2 million.
But unlike in the previous budget, the city isn’t pursuing layoffs at this time. In 2009-11, the city eliminated 15 staff positions, seven of which were vacant.
The reserve spending will whittle the city’s savings to about $4.6 million in 2013, or about 27 percent of its total expenditures. The minimum reserve set by the council is 20 percent of expenditures.
About 46 percent of the city’s general fund revenue currently comes from property taxes, according to the city.
Total property tax revenue is estimated at about $6.8 million for fiscal year 2011-12. That represents “a sharp 11 percent decrease in the three years since its peak of $7.7 million in 2008-2009,” according to the budget.
Sales tax revenue accounts for 15 percent to 20 percent of current general fund dollars.
Sales tax revenue is estimated to be about $3 million in 2011-12, about a 1.4 percent decrease from 2008-09.
State cuts to county funding will also affect local cities’ revenue by tacking on added fees that weren’t in the previous budget.
According to Gov. Jerry Brown’s revised budget released in May, starting in 2011-12, the county Sheriff’s Department will be able to charge arresting agencies $70,000 annually for bookings into its detention facilities and $12,000 per year for administering exams to victims of sex crimes.
Atascadero cuts back
City staff has made several cuts to lessen reserve spending since the winter. An approximately $3.55 million gap was reduced to $2 million. Steps taken already:
Suspended funding some road repairs and local paving projects.
Stopped televising Planning Commission meetings, except for big-issue hearings.
Put off replacing city vehicles.
Stopped savings toward the replacement and major repair of city buildings and equipment.
Reduced paying for neighborhood tree chipping services, limiting it to grant-funded chipping for large rural lots that pose more of a wildfire threat.
Lessened overtime and supplies for police and fire to help out other agencies’ emergency responses within the San Luis Obispo County mutual aid program.
Cut 5 percent from each city department in printing, paper and other operational fees.