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Lathrop plan: Create private-sector jobs to ease city fund woes

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POSTED April 27, 2011 1:21 a.m.
LATHROP – Because expenses are expected to exceed revenue for the next five years, the City of Lathrop is preparing to tap into its reserves to cover its budget starting in 2012.

The answer they hope will solve the problem? More economic development.

With the end of agreed-upon furlough days coming in the future and an annual escalating increase to Lathrop Police Services scheduled to jump from three percent up to 10 percent based on the current contract, the city will have to turn to its general fund, Finance Director Terri Vigna said, to cover the shortfalls.

The $7.2 million balance projected at the end of this fiscal year is projected to shrink to $4.9 million by 2016.

But later in the same meeting, the council agreed to extend the consulting services agreement for economic development services through June 30 for a cost of $26,775 – hoping that recruiting business and industry to the community will help bolster the tax base and build jobs to stimulate the local economy.

When Mayor Joseph “Chaka” Santos pressed City Manager Cary Keaten about whether it was a position that the city needed, Keaten responded with “If we want to grow” followed by a “yes.”

Some of those in the audience, however, wished that it was something that would have been done much sooner rather than putting it off until the contract was on the verge of expiring.

“I wish people wouldn’t have waited to the last minute on this because it’s important to the community,” said John Wall. “Let’s just get it done. I hope you get it done, get it over with and not make it a taco truck-like issue.”

Staff’s recommendation to approve the funds to extend the contract, according to the presentation made, are based on the assumption that no momentum is lost between the consulting services contract culminating at the conclusion of the fiscal year and the new position which will begin on July 1, 2011.

Several projects are currently in the pipeline and are being negotiated between Economic Development Administrator Steve Carrigan and representatives from companies that may be looking at coming to Lathrop.

Keaten also got permission from the council to begin recruiting for a full-time economic development position that if funded – something that won’t be known until the budget for the next fiscal year is approved in June – would begin on July 1. The move will allow Keaten to start interviewing prospective and qualified candidates for the position should it become available.  

Depending on the success of the position and the contract currently in place, the cost associated with economic development, in theory, should end up paying for the cost of the employee or the consultant. By drawing in businesses – which pay development and permitting fees during the early phases of the process – that are expected to stimulate and grow the local economy, some have used the term “spending money to make money” to describe the process.

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