Council Expresses Views Concerning Cuts During Budget Workshop

The City of Turlock needs to balance a projected $5 million deficit in 120 days. $1.7 million in cuts have been identified, while using approximately $3.2 million of General Fund Reserves this year.
Tuesday’s Budget Workshop mentioned the words cut, cuts, cutting, reduction, loss, deficit, and such more than people would have thought.
Interim City Manager Gary Hampton pointed out that with only about 120 days left in the fiscal year (ending on June 30, 2009), that the amount of proposed cutting was significant.
A proposed $1.7 million cost reduction strategy included $450,000 in operational cuts, restricted travel and training, a hiring freeze, relocating General Fund employees to vacant non General Fund positions, and a voluntary 5% employees’ contribution towards their health care or retirement plans.
The majority of the Turlock City Council has already stated publicly that they would be alright with spending the nearly $20 million in Reserves down to about $10 million by June 30, 2011. This would leave Turlock with an approximate 25 to 30 percent General Fund Reserve. Most cities never reach that point.
The same cost reduction strategy applied to a 12 month period would equate to about $2.5 million in savings. The delimina is that it appears sales tax revenue will continue to go down, thus creating a bigger deficit to cover.
Councilwomen Amy Bublak and Mary Jackson both expressed in previous meetings that they would like to see Reserve funds used earlier to lessen the impacts related to service reduction and job loss.
Councilwoman Jackson continues to suggest bench marks before drastically cutting as she is hopeful that Turlock may receive stimulus monies, experience a shorter than expected economic situation, or some other positive impacts that could bring the city out of the tough situation.
Vice Mayor Ted Howze and Councilman Kurt Spycher have made statements of concern related to the future of the economic situation, cautioning up front spending which may force more drastic cuts in regards to jobs and community services all at once.
Councilman Spycher has stated repeatedly that we have not seen the full effects of this economic downturn. The city is still receiving sales tax revenue from current and future losses including Mervyn’s, Circuit City, Varco-Pruden, Turlock Auto Plaza, and Woods Furniture (who is moving outside the city limits).
Mayor John Lazar is the only Council Member who has had to make the tough decission to cut jobs in the past. Mayor Lazar has stated many times that he’ll do whatever he can to save jobs and get through this tough time while working to continue providing community services.
Mayor Lazar and Vice Mayor Howze were appointed to a budget committee that will be working to direct staff of the Council’s vision in preparation of the 2009-10 budget.
The proposed mid-year budget and cost reduction strategy is scheduled to be presented to the Turlock City Council at the next Council Meeting at 7:00 pm on March 24, 2009 at City Hall.

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