By Katrina Van Duzee/Garden Grove Journal
Despite reaching a balanced budget for the 2011-2012 fiscal year Garden Grove is far from being worry free, according to Finance Director Kingsley Okereke.
Garden Grove has consistently avoided budget deficits throughout the “Great Recession” thanks to a three-year economic plan focused on cutting back on employee overhead, dipping into reserve funds and promoting projects that yield economic growth, Okereke said.
The challenge now is waiting to see if all that hard work will be tossed up if the State does away with redevelopment agency funds.
“I’m happy to say we have a balanced budget, especially in these economic times,” Okereke said. “We continue to be able to sow the seeds for economic growth.”
Although the city staff presented the annual budget at the June 28 city council meeting, all who gave a staff report threw in a disclaimer stating that these figures do not take into account the state’s pending budgetary decision.
Okereke estimated that up to $8.3 million in funds could potentially be yanked from the city’s federal funds, in which case the city would have to go back to brainstorming and rework their budget.
The California legislature apporved a budget last week that threatens redevelopment agency-funded improvement projects and slices funding for social programs and education. Two specific redevelopment bills, AB X1 26 and 27, remain a threat to California’s redevelopment programs.
Garden Grove’s budget was approved 5-0 and includes allocating $38 million to the community development agency and $159 million towards basic city services for the next year.
Problematic areas within the city’s revenue include a rapidly declining interest revenue and a slowly inclining sales tax.
The city was able to cut $6.8 million by reallocating vacant city position funds and pulling $9 million from its reserve funds.
“We have to go back to the drawing board and draft another three-year plan on how we are going to survive,” Okereke said. “We thought we would be recovering from the recession by now, but we are not.”