Paso Robles has seen what city leaders are calling a marginal recovery after years of shortfalls and program cuts.
Even still, there’s not enough money returning to city coffers to start adding back programs that had been slashed, such as reopening the Centennial Park pool.
The City Council this week received its five-year financial forecast for fiscal years 2014 to 2018.
“Bottom line, the city’s finances are improving, primarily due to continued cost-cutting (principally in the form of fewer staff),” City Manager Jim App wrote in a staff memo on Wednesday.
“Annual operating surpluses are forecast, but not so great or reliable that significant or sustained service restoration can be implemented on a large scale.”
Since 2008, the city reduced its general fund spending by eliminating more than 34 percent of its jobs through attrition and retirement incentives and by cutting temporary and contract help, trimming contractual services, suspending wage increases, reducing benefits and eliminating some maintenance services. City leaders also cut a youth program and closed one of two city pools.
In the forecast report, App said the city’s latest forecast projects “small, but growing” surpluses for each of the next four fiscal years, ending June 30, 2018.
The city’s general fund — the main account for basic city services such as police, fire and parks — had nearly $27 million in total revenue this fiscal year 2013-14, which ends this month. That sum is projected to grow to nearly $32 million by fiscal year 2017-18.
Growth in property tax, sales tax, bed tax from hotels, and other fees charged to the public all help build up those funds.
However, salary and wages for city employees, maintenance and operations and related expenses are expected to eat up most of that.
But spending cuts made in past years are projected to provide annual surpluses totaling $6 million by fiscal year 2017-18, according to the forecast report.
The city separately tracks dollars from the supplemental sales tax that voters approved a year and a half ago to fix city roads. Voters agreed to add a half-percent to their sales tax for 12 years on purchases in town. The sales tax increase went into effect April 1, 2013, and is expected to generate $3.5 million to $3.9 million annually for new roads.
Elsewhere, the city’s general fund reserves are also showing gains. The council has been conservative with these savings in recent years.
The city currently has $12.3 million in general fund reserves, with about half of that earmarked for projects the City Council has deemed important, such as a new city hall and vehicle or equipment replacements. However, the earmarked money could be used for something else should the council opt for that.
“In the dire depths of the recession we had been listing this to show the council that we do have this much in the bank for these things, but if it got so bad, you have this other money as a backup to your backup,” said Jim Throop, the city’s director of administrative services
General fund reserves are expected to grow from $12.3 million to nearly $18 million by fiscal year 2017-2018.
Accounts for the city’s water, sewer and airport funds — not paid by taxes but through service and user fees — are expected to remain stable over the next four years.
But the city’s water fund, which has been at risk due to lawsuits in years past, shows a deficit of $11.3 million until fiscal year 2015-16 when construction of the city’s new water treatment plant is complete.
That’s because the city is using cash reserves from its water account to build the plant rather than take on new debt, Throop said. After that, the forecast shows positive numbers in the water account again.
Transit is no longer in the city’s budgets because the Regional Transit Authority took over the city’s bus service June 1.