Nevada City budget at crossroads
The Nevada City Council will hold a budget workshop Wednesday morning where it will hear about adjustments to this year’s budget and determine how far cuts will go next year.
The online meeting will be at 11 a.m. Wednesday. People can view the meeting on the city’s YouTube channel and can comment live on the chat function or by emailing firstname.lastname@example.org before 10 a.m. Wednesday.
For the 2019-20 budget, after adjustments of over $17,000 in revenue and over $87,000 in expenditures, Nevada City will be at a nearly $70,000 deficit. The city’s biggest revenue adjustment is for parking meter fees, which are projected at $185,000 below budgeted amounts.
The city’s Measure C fund, a sales tax funding public safety, is at a $75,000 deficit. The measure currently pays for three firefighter positions, a police officer and debt on a new fire engine, but a budget document warns that with growing pension costs the tax may not be enough to support additional positions and equipment needs.
The Measure S fund, which pays for streets, roads, storm drain and sidewalk projects, will see an $80,000 increase in expenditures, leaving a $2,000 deficit.
The water fund will see a $138,000 deficit stemming from a $142,000 increase in expenditures, and the wastewater fund will see a $315,000 deficit stemming from a $35,000 increase in expenditures and $15,000 less revenue than expected. The wastewater fund was projected to have a $265,000 shortfall at the beginning of the fiscal year.
The council will be presented with three scenarios for next year’s budget, all of which offer cuts and lead to “deficit outcomes that will impact the General Fund negatively.”
The city projects revenue next year to be $4,533,607.87.
Under Scenario One, the city would lower its expenditures by reducing the Parks and Recreation budget, city attorney budget and freezing two full-time and three part-time vacancies in the police department.
This would bring the city’s expenditures to $4,875,198 after accounting for a 1% increase in pension costs, leaving a $341,590 deficit.
This plan would leave deficits of $25,000 for Measure C; $70,000 for the water fund; and $424,000 for the wastewater fund. Measure S would have a positive $26,000 balance.
Scenario Two would take more drastic measures, keeping the pay freezes and enacting additional across-department cuts, including all capital outlay and major maintenance projects. The 4.6% decrease would lead to expenditures totaling $4,611,223, but would still leave a $77,615 deficit.
The largest driver of spending cuts in Scenario Two is capital outlay — typically infrastructure projects — throughout city departments.
Under this plan, Measure C funds would have a positive balance of $10,000 based on sales tax projections of $426,000, and Measure S would have a $178,000 balance. The water fund would have a $47,000 balance, based on a 3.8% overall spending decrease stemming from operational cutbacks. The wastewater fund would see a $183,000 deficit due to a 3.2% increase in operational expenditures and a 33% increase in capital outlay spending tied to mandatory compliance projects.
The third scenario would enact all previous cuts, but also include a one-day per pay period furlough across departments, except the police department due to its vacancies. The cuts would amount to a 7.5% decrease in spending, putting total expenditures at $4,468,427 and leaving a $65,181 surplus.
This plan would put the Measure C fund at a $27,000 balance and the Measure S fund at a $181,000 balance. The water fund would have a $68,000 balance based on a 7% spending decrease stemming from operation cutbacks and a capital outlay budget that’s 18% less than the previous year. The wastewater fund would see a $136,000 deficit after a 2% decrease in the previous year’s budget.
To contact Staff Writer John Orona, email email@example.com or call 530-477-4229.
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