SOUTH GATE — The city will have a balanced general fund budget when the new fiscal year begins July 1, but it took numerous cuts, early retirements, layoffs and the elimination of vacant positions, according to Finance Director Michael Matsumoto.

The City Council approved the budget June 8 after previously directing staff to balance the general fund, which includes the main business operations such as city manager, police, recreation and public works.

It anticipates revenues of about $34.5 million and spending of the same amount. That’s a 9.3 percent decrease from last year’s $37.3 million. Without the cuts, the general fund would have been in the red by $3.5 million Matsumoto said.

However, total city revenue is projected at $102.8 million with expenses of $108.25 million. That includes $23 million in capitol projects, most of that coming from grants, said City Manager Ron Bates.

The general fund cuts included early retirement incentives, elimination of 20 vacant positions and 11 layoffs.

Revenue increases will come from higher service fees and parking fines, the latter expected to bring in an extra $350,000, Matsumoto added.

But he warned that while balanced, the general fund budget has no surplus for emergencies and no accumulation of expected retirement benefit increases.

Because of the bad economy, sales tax revenue is expected to decrease by $700,000 in the coming year to $4.89 million as compared to $7.83 million for 2007-08. Property taxes are expected to remain steady and development activity will remain slow.

A major project, the 600,000-square-foot retail development, El Portal, at Firestone Boulevard and Atlantic Avenue, is on hold as the developer is in default, Bates said.

All city departments will feel the cuts, Matsumoto said.

The police department has 80 sworn positions and 37 civilian jobs as opposed to 92 and 40, respectively, last year; parks and recreation has eliminated seven positions and canceled some summer programs and public works has dropped five employees resulting in less tree trimming and maintenance of city buildings.

Also, the community development department eliminated five positions including the vacant assistant director slot and a building inspector and the finance department, which had a staff of 30 five years ago, lost two employees this year to decrease to a staff of 21.

The administration department, consisting of the city council, city manager, community promotion and personnel, saw cuts everywhere but the city clerk’s office, which increased to $363,781 from $276,705 this past year; and the city attorney, which increased to $1.2 million from $988,000.

The finance department cut spending to $1.76 million, down from $1.84 million. Parks and recreation dropped to $3.88 million, from $4.24 million. The police department decreased to $18.41 million from $19.5 million.

Community development, including code enforcement and planning, declined to $1.9 million from $2.43 million; and public works decreased to $2.6 million from $3.5 million.

Although the general fund is balanced, many other city funds, such as water, insurance, trash and street sweeping, are expected to have deficits, made up from reserves.

Water rates have not kept up with costs and maintenance has been deferred. The city is experiencing breaks in sewer and water lines and in street lighting circuits, both of which could require higher rates in the future, Bates said.

However, the city has an unemployment rate of 15 percent with the loss of some 500 jobs in the past few years with the closing of U.S. Gypsum and Hon Furniture. Also the Casa de Gonzales Chrysler dealership, one of the highest sales tax generators, closed early this year.

Bates said the trash fund has a $600,000 deficit, caused mostly by cleaning up illegal dumping.

The City Council will try to halt that with an ordinance to crackdown on dumpers. A public hearing began June 8 and will be continued July 27.

Public Works Director Robert Dickey said the proposed ordinance will call for citations to property owners who fail to remove items from public right-of-way, even items left there by others.

It will allow police to arrest those caught dumping and impound their vehicles.
“Eighty percent of illegal dumping occurs at apartment units, commercial and industrial properties,” Dickey said.