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Lathrop city officials: Were not broke!
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LATHROP – Lathrop City Manager Cary Keaten said there are many cities in California that have zero reserves and are on the brink of financial collapse due to the lingering Great Recession fueled in large measure by the mortgage meltdown.

But Lathrop is one of the lucky ones, Keaten said. And City Council officials agree.

“We’re not broke,” the city manager assured this week.

The city has $6.5 million in reserves that it’s falling back on to tide them over during these fiscally tight times, he said. And it’s this savings that the city will be depending upon based on the five-year survival plan that the city staff crafted last year.

The question about whether the city is broke came up at a recent council meeting when retired farmer Dan Doyle criticized the council for approving the $535 price tag for the sign, “In God We Trust,” to be displayed in the council chambers at City Hall above the city logo. On top of the cost for the sign, Doyle said he was also concerned about the expense that the city may have to contend with in the event of a lawsuit.

He then concluded his speech saying to the council, “I don’t know what you, guys, are thinking. How do you get it through your heads that we don’t have the money!”

Responding to Doyle’s tirade, Councilman Sonny Dhaliwal said, “It’s sad when people come here and lecture us without the facts.”

Then turning to the city manager, he asked, “Are we broke, Cary?” Then he asked how much money the city has currently in the general fund and reserves.

Keaten explained that the city is anticipating to have a reserves of about $4.5 million at the beginning of the 2010-11 fiscal year on July 1.

“So we’re not broke,” Dhaliwal said turning his attention back to Doyle.

“But we’re not rich!” was the reply from Doyle after being momentarily rendered speechless.

Asked to provide the figures to support their statements that the city, indeed, is not broke, Keaten said the city’s total general fund is $14.5 million. On top of that, by the end of this fiscal year on June 30, 2010, it is expected that the city will have remaining reserves totaling around $4.5 million, he said.

“That’s our savings account for the general fund,” Keaten said of the general fund reserves. Those are money that the city “built up over the years” and managed during the “good years when we had the building boom and property tax revenues were good, and sales tax revenues were good,” he explained.

Like the rest of the cities and counties in California, Lathrop was hit hard by the dramatic drop in property tax revenues. Because of all the reassessments and home foreclosures, property tax revenues dropped 20 percent from the year before – a total of $2.7 million – which greatly contributed to the current fiscal year’s budget deficit, Keaten explained.

Sales taxes have not been “exceedingly high in Lathrop but it’s still relatively good,” he added.

While trying to stretch the general fund reserves for as long as possible and to pare down the $2.5 million deficit in the current fiscal year – the same amount is the anticipated deficit for each fiscal year in the next five years – Lathrop, like any city and county in the state, resorted to furloughs across the board which cut 10 percent off city employees’ salaries and closing down city hall one day a week, plus the elimination of positions – 10 filled and five budgeted but unfilled – in May of last year.

As part of that budget trimming, the Lathrop Police Services lost three deputies to the San Joaquin County Sheriff’s office which essentially reduced the proposed $4.9 million contract for police services to $4.5 million with no reduction made on patrol officers. Lathrop contracts its police services with the county Sheriff’s Office.

Additionally, the city whittled down its budget shortfall in the current fiscal year by getting rid of other expenses including staff training, trips, some office equipment purchases, controlling overtime expenses, reorganizing departments and staff at city hall, and giving up the rental space at a building on Seventh Street.

As for the “In God We Trust” sign, the city won’t pay a penny as individuals stepped forward and promised to cover the tab.