The City Council will get its first official look at the
finances of 2005-06 when it receives the draft city budget on
Wednesday. But, after Gov. Arnold Schwarzenegger
’s “May Revise,” in which he announced last week a windfall of
an unexpected $2 billion in state tax revenue, things look a bit
brighter at City Hall.
The City Council will get its first official look at the finances of 2005-06 when it receives the draft city budget on Wednesday. But, after Gov. Arnold Schwarzenegger’s “May Revise,” in which he announced last week a windfall of an unexpected $2 billion in state tax revenue, things look a bit brighter at City Hall.
City Manager Ed Tewes said the May Revise gives him hope that the continuing budget crisis may be easing.
“The governor proposed not to suspend Prop. 42, putting the City of Morgan Hill in line for $150,000 for road resurfacing, which is desperately needed,” Tewes said. “The general fund stopped paying for this two or three years ago.”
The second reason is that the state “takeaways” – the cause of city and county budget stress throughout the state – will lessen if the governor’s proposal is adopted.
“The governor proposes to advance, by one year, half of the repayment due to the city from various vehicle license fee shenanigans,” Tewes said.
Last year the city lost about $342,000 over a compromise in which the city gave up VLF for two years and received a promise for repayment in 2006-07, plus a shifting of property tax income.
The total budget estimated at $106,376,631 and includes a $1.2 million deficit but no layoffs. Tewes said the council had instructed him in January to prepare a budget with no layoffs even if it meant a larger deficit. Any shortfall can be filled with money from a reserve fund which was built up during recent economic good times (before 2001).
The estimated 2004-05 budget was $83,762,784. The Redevelopment Agency expenditure was projected to be $14,837,665 in 2004-05 and $28,279,211. The agency was finishing the $12 million Aquatics Center in 2004; during 2005-06 the RDA will pay for the indoor recreation center ($24 million) and begin the new library ($17 million).
Forty-four percent of the budget is in capital (building) project funds, 36.6 percent is dedicated to special funds and debt service and 18.8 percent is in the general fund.
The general fund ($18,732,301 in revenues, $19,982,241 in expenditures) pays for police and fire protection (65.7 percent), recreation and park maintenance (19.1 percent) and city administration (city council and clerk, city attorney and city manager, human resources and finance – 15 percent) and .1 percent for other.
The proposed 2005-06 general fund is $133,007 less than the 2004-05 budget.
The draft budget predicts the city will spend $1,249,940 more from the general fund than it takes in.
After a workshop where department heads justify their own budgets and a public hearing for residents to weigh in, the draft budget will return to council on June 15 for another look. Council is expected to approve an amended budget on Wednesday, June 22.
The 2005-06 city budget can be read online at www.morganhill.ca.gov/
