Adding up Modesto’s budget numbers

This is a story about the Modesto city budget and how confusing it can be when you add up the numbers.

City officials Friday updated the reasons behind why Modesto has a $5 million surplus from its roughly $118 million general fund budget for its 2014-15 fiscal year, which ended June 30.

Some context:

Modesto’s finances were part of the discussion at a Wednesday meeting in which city officials heard a proposal from a consultant to conduct a $60,000 retail and market study to help the city identify the retailers it could recruit. The $60,000 would come from the general fund, which primarily pays for public safety.

Chamber of Commerce Vice Chairman Steve Madison said at the meeting that while he was not weighing in on the merits of the proposal, he said residents were bewildered by the city’s finances.

He said the city was saying it was in dire straits when it had a sales tax increase on the November ballot. Voters rejected the tax, but Madison said the city is now tapping its general fund to pay for police raises; for hotel rooms and meals for the Amgen Tour of California cyclists (the elite cyclists are not racing here; you’ll have to go to Lodi to see the race); and now for this proposal.

Officials said at Wednesday’s meeting that the 2014-15 general fund surplus would cover the $75,000 for Amgen (though city officials hope to raise money from the community to offset that cost) and the $60,000 for the retail study if the City Council approved it.

Finance Director Gloriette Genereux said after the meeting the surplus was $2.1 million and then revised that to $5 million.

So is it $2.1 million or $5 million? Genereux said Friday it’s both.

She said for accounting purposes the surplus is $5 million. In practical terms it’s $2.1 million.

Modesto received $2.5 million in December 2014 from the dissolution of the Modesto Regional Fire Authority. That money is part of the 2014-15 general fund surplus for accounting purposes.

Genereux said the City Council already had decided to use that money for the Fire Department budget and $1.6 million of it has been allocated in the current 2015-16 budget to keep Fire Station No. 6 open. She said the remaining $900,000 can be used to keep the station open in the city’s next fiscal year.

So if the city has a $5 million general fund surplus and you subtract the $2.5 million in MRFA money that should leave $2.5 million. But Genereux said the remaining surplus is $2.1 million because the city has spent $400,000 on maintenance and repairs for fire stations.

City officials plan to talk about the 2014-15 general fund surplus later this month at the City Council’s Effective Government Committee meeting, and the audit results for the 2014-15 budget at the council’s Audit Committee meeting.

“It’s confusing,” incoming Mayor Ted Brandvold said, adding he hopes to shed more light on the city’s finances through his line-by-line review of the budget that he will undertake during his first 100 days in office.

This story was originally published February 14, 2016 at 12:56 PM with the headline "Adding up Modesto’s budget numbers."