Paso Robles may see general fund revenue increase

Correction: An earlier version of this story incorrectly stated that 76 positions were eliminated in roadwork and contracted maintenance. The positions were cut in all areas of city operations.

Paso Robles could see a small increase to its general fund revenue through 2015, bringing its finances out of the red and prompting the City Council to seek ways to rebuild services whittled down during the economic downturn.

The city has reduced its spending since 2008 to address multimillion-dollar shortfalls as revenue from sales tax, property tax and other public fees declined. Those cuts grew to more than $7 million per year since 2009, affecting all city departments.

Among the cuts were 76 positions eliminated citywide through attrition and a hiring freeze. Roadwork and contracted maintenance were axed. A teen center and a city pool also closed in 2011, and some public fees were increased.

But the community’s concern has largely been centered on what is considered too few police officers and shabby streets, triggering the council to look for solutions.

Each department is now slated to pitch its needs at a daylong public workshop scheduled for 9 a.m. Feb. 11 at City Hall, and the community can weigh in.

A financial forecast presented to the council Tuesday night also predicted that sales tax, business license fees and other revenue would recover slightly starting this fiscal year, bringing the general fund approximately $1.3 million in total revenue gains through the next five years.

Transient occupancy tax, which hasn’t dipped during the economic downturn, is also expected to remain strong.

But, as with most predictions, city officials cautioned that the financial climate could change.

“We’re just barely turning a corner here. So our recommendation would be, ‘Let’s see if this trend holds before we start spending,’ ” City Manager Jim App said.

Looking ahead, general fund revenue is budgeted for $24.6 million in the current fiscal year and could grow to about $26.3 million in fiscal year 2014-15, according to the forecast.

Paso Robles also has approximately $10.1 million in general fund reserves this fiscal year that could grow to $11.7 million in five years. The reserves are typically held as savings for unforeseen expenses.

The council has opted to keep those reserves intact while reducing spending to cover its shortfalls, but it did dip into the reserves in June for $310,000 to cover the last gap in the forecast.

Staying conservative remains a priority for the council.

“I would advocate being lean,” Councilman John Hamon said. “The only reason that we’re in the black is because we cut so much.”