City’s deficit swells to $650,000 |

City’s deficit swells to $650,000

Grass Valley is $650,000 short in its general fund budget and will need to find ways to balance it amid declining tax revenues.

The situation is worsened by the lack of a state budget and the uncertainty of its impact on the city, said City Administrator Dan Holler Tuesday night at the City Council meeting.

“There were a lot of uncertainties in our property tax and sales tax projections,” Holler said.

Original projections caused a $215,000 deficit when the budget was adopted earlier this year, but now the shortfall has grown to $650,000 as tax revenues continue to come in at a slower rate than predicted. Slow movement in the housing market and a general decline in consumer spending have caused tax revenues to drop, Holler said.

About $200,000 of the shortfall will be taken care of by decreased employee expenses, Holler said. In the last week, three full-time public works employees were laid off and another worker had his hours cut.

In the last three years, the city has lost 17 positions, going from 140 to 123, Holler said. In addition, several police and fire department employees will be retiring or leaving by the end of the year.

One police sergeant will probably be replaced by a street patrolman and the fire chief spot will also probably be refilled by a regular fireman, Holler said.

Other cost-cutting options include a modified hiring freeze, reduction in spending, a reduced work week at City Hall and shutting down City Hall up to one day per week.

“Do we need to be open from 8 to 5?,” Holler asked rhetorically.

Three years down the road, the city might find itself leaner but more efficient, Holler said. He expects staff members to come back with recommendations in 60 days to make up the remaining $400,000 general fund deficit.

Upcoming negotiations with city bargaining units will have to take the Grass Valley’s fiscal status into play, “and that will make it more difficult,” Holler said.

Meanwhile, a plan to issue $5 million in redevelopment bonds for cooperative construction projects was approved by the Grass Valley City Council Tuesday night.

The bonds have been used for downtown infrastructure projects in the past, such as storm drainage.

“We want to start talking with property owners about streets, sidewalks, water, sewer and drainage issues,” said City Administrator Dan Holler. “We want to partner to reinvest in neighborhoods,” which include Colfax Avenue, South Auburn Street, downtown, the Idaho-Maryland Road ” East Main Street area and infrastructure in general.

“We need their input and what they need to make their businesses more profitable,” Holler said. “We’re looking for on-the-ground projects with partners.”

Projects will be picked with priorities for readiness, participation of the property owner, benefits to the public and investment return, according to city documents.

“Five million won’t go far. The question is who is ready and can we leverage that investment?” Holler said. “Hopefully we’ll get four or five projects.”

The council approved a ceiling of $9 million in redevelopment bonds, with $5 million in new ones to be issued and more than $3 million in rebuilding bonds the city holds for refinancing.

Some ideas are circulating for the bonds in each of the areas, Holler said. The downtown area needs parking spots, and the city will look at using part of the money to handle parking.

“There are vacant buildings on Colfax Avenue. How do we deal with that whole area?” Holler said.

The Idaho-Maryland area around the under-construction roundabout with Sears, and the proposed Longs offer potential, Holler said. The vacant lot left on East Main Street, where Weaver Auto and Truck Center was before moving to Idaho-Maryland Road, could also be promising, he said.

A new bus transfer station on Tinloy Street between Bennett and Bank streets also is a possible project, Holler said.

The concept from the Nevada County Transportation Commission for a turnout for Gold Country Stage buses and shelters for riders also could serve as a kickoff to the Wolf Creek Trail project, Holler said.

The site already has been studied with federal funding and could possibly become a reality if the city’s bonds are used, but the early cost estimate is $2 million, said Dan Landon, executive director of the transportation commission.

The Tinloy Avenue site would mean easy access for busses and riders going into downtown, Landon said. The transfer site at Church and Neal streets is tight and does not provide enough room for all busses at times, he added.

To contact Senior Staff Writer Dave Moller, e-mail or call 477-4237.

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