By Brittany Hanson/Garden Grove Journal
A new projected budget shortfall of over $2.3 million in the general fund has Stanton looking at hard options to keep the city’s finances healthy.
In the new fiscal year, which begins in July, a drop like this could mean a reduction of services offered, including the suspension of city-sponsored special events and cuts to programs to seniors and youth. Such trims to public services would become a reality in a worst-case scenario if the situation further declines.
Potentially, such events as “Christmas in the City,” the annual Easter egg hunt and Halloween festival would not be seen until the budget problems are righted, according to city officials.
However, there are other options to help the city prop up its general fund before it would come to this.
Six months into the fiscal year, Stanton is looking at some tough numbers. Six months ago, the city’s general fund balance was projected to decrease by $1,026,430, but the decrease has proved to be much larger.
Terri Marsh, Stanton’s administrative services director, informed the city council at Tuesday’s meeting of these numbers and potential steps that may have to be taken.
At present, the city council has decided to wait and see what the next six months hold in store before making any moves. Total revenue loss in the city’s general fund is estimated to be $513,448, which is 3.6 percent.
Right now one of the top issues is the drop in sales tax, which means that buyers are shopping less in the city. The city’s sales tax comprises 21 percent of the general fund, approximately $3.2 million.
The city has collected $1,229,000 in sales tax over the last seven months, compared to $1.3 million the same time last year.
Property tax falls below budget estimates at $399,823 and non-tax revenue sources like Rental and Lease are down by 95 percent.
Marsh said that although the numbers for tax revenue are not reassuring, that they are not as bad as they look. The worst of the drop is probably over and things have been leveling out for the last year.
“Flat is the new up,” said Marsh.
Marsh showed the council three options to help.
Option one is to transfer funds from internal services funds to the general fund. This would be at a total of $1,457,000 to support the general fund.
The next option is to use general funds reserves. By using an available General Funds balance, they could stabilize the revenues and expenditures gaps,
Option three would be to further reduce department expenditure budgets. In order to adjust this, city departments would have to reduce their budgets by 17 percent. Reductions in this number would most likely result in furloughs and layoffs.
“You’re talking about people who are saying, hey if you don’t really need that pencil, don’t buy the pencil . . . there is nothing left to give,” said Carol Jacobs, city manager.