Los Banos City Council approves $36.9 million budget

Merced Sun-StarJune 22, 2014 

Los Banos City Council unanimously approved a “not wealthy, but healthy” budget for the 2014-15 fiscal year Wednesday night.

The $36.9 million budget reflects a transition between current fiscal realities and optimism for the future, the council said.

The city projected general fund expenditures of almost $10.8 million, maintaining $6.7 million in reserves. This is a $560,000 increase from the 2013-14 expenditures, according to Finance Director Sonya Williams.

The city projected revenues of about $10.6 million, resulting in an operating deficit of nearly $194,000.

Factors that have contributed to the deficit, according to the budget report, include increases in health insurance premiums, workers’ compensation insurance and property insurance. Salaries and benefits are forecast to grow 10 percent, restoring some of the losses labor groups experienced four years ago.

Williams explained the operating deficit is dependent on a number of key economic, policy and budgetary assumptions. For instance, the city anticipates a steady growth in the economy, but it is unsure of the impact the drought may have on expected revenues.

Los Banos intends to maintain a conservative budget and keep a tight rein on spending for the next few years, Williams said. The city’s long-term goals, according to the report, are to shift employees back into the general fund from Measure K, an amendment passed by voters in November that allows money from a half-cent sales tax measure to continue to be used for salaries of emergency services personnel; fund unfunded positions; and continue to reinvest in employees. The city will also focus on maintaining public safety, sustaining an operating reserve and managing structural deficit in the general fund.

Public safety accounts are the largest portion of the general fund, with police and fire accounting for more than 70 percent of the budget.

City Manager Steve Carrigan said he is pleased with the direction the economy in Los Banos is headed.

“Healthy, not wealthy, I think that’s the accurate description of where Los Banos is at right now,” Carrigan said.

“Four years ago, labor groups and City Council made good decisions that we’re benefiting from today,” Carrigan said. “Labor groups gave up about 10 percent of salary and benefits, and now we are able to restore some of what they gave up.”

Carrigan also said that seven homebuilders are ready to build houses in town, and anticipates building will greatly help the city’s economy.

“We’re still not out of this poor economy, but we’re moving in the right direction,” Carrigan said. “I think this time next year we’ll really be smiling.”

Mayor Michael Villalta said he feels confident moving into the new fiscal year.

“Where we are now is light-years apart to where we were a few years ago,” Villalta said. “We have a great finance team, and I am very pleased to see we have the reserves we do.”

Villalta also said he was pleased with the continued effort to bring Measure K employees back into the general fund ahead of schedule.

The council also heard from Douglas Johnson, president of the National Demographics Corp., who introduced criteria to guide the preparation of council districts for submission of a by-district election method to voters on the Nov. 4 ballot. The council will meet next week to further discuss the drawing of districts.

Sun-Star staff writer Ana B. Ibarra can be reached at (209) 385-2486 or aibarra@mercedsunstar.com.

Modesto Bee is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service