Tuesday, May 13, 2008

Modesto official says bleeding may not stop next budget year

By ADAM ASHTON
aashton@modbee.com

last updated: April 04, 2008 12:39:10 PM

Modesto's budget outlook is worsening and the city must trim an additional $1.3 million, acting City Manager Jim Niskanen announced this week.

The reductions follow $14.5 million in cuts the City Council approved four months ago.

The city would make the additional cuts primarily by enforcing a hiring freeze, eliminating employee travel and training, and decreasing spending on office supplies, Niskanen said.

Carrying out those cuts is expected to protect a $10 million reserve in the city's general fund, which represents about 8 percent of the city's spending in that account. Modesto expected to spend $135 million from the general fund before it carried out the December cuts.

The city is preparing more drastic cuts as it looks ahead to next year's budget, Niskanen said. That plan is expected to become public at council hearings in May before it goes to a council vote in June. The city's budget year starts in July.

Niskanen asked department leaders to prepare budget proposals that would cut spending by 3 percent, 5 percent or 10 percent. The highest number would shave $12 million from the general fund, which pays for public safety, parks, planning and a number of general city services.

The city is doing "whatever we can do to bring that number down to a more manageable level," Niskanen said.

The council's December budget cuts required the city to leave vacant 25 police positions and nine firefighting jobs. Little-used park features were closed, while other departments stretched resources with fewer employees.

Councilman Garrad Marsh said the cuts are noticeable in the Police Department, adding that the staff reductions increase overtime spending.

"We do have loss of service in the Police Department," he said, "even though that's not evident unless you're making a call and you can't get the police out to your place."

Niskanen instituted the new reductions when the city revised its projections for sales tax revenue for the fourth time since the council passed the budget during the summer. Finance Director Wayne Padilla said Modesto expects to bring in about $27.4 million, down from the original estimate of more than $29 million.

"We're managing our expenses toward our revenues that are declining," Niskanen said. "Ultimately, it means we won't be able to do everything we're doing today if our revenues are declining."

Bee staff writer Adam Ashton can be reached at aashton@modbee.com or 578-2366.