Stronger than expected taxable sales during the pandemic coupled with surging resale home prices producing more property tax receipts helped increase revenue for the City of Manteca to reduce its projected general fund shortfall to $3.1 million for the current budget year.

While that is an improvement over the previous projection of a $6.5 million deficit, Councilman Charlie Halford noted that “it is not sustainable.”

His warning that inflation, the expectation energy prices will soar due to the Ukrainian crisis, the fact employee groups haven’t had pay raises, and pressing needs competing for not enough dollars could set the tone when the council gathers Thursday at 9 a.m. at the Manteca Transit Center for their goal setting session for the upcoming budget for the fiscal year starting July 1.

Manteca is tapping into general fund reserves to cover the difference between revenue and expenditures during the 12-month period that will end June 30.

Such a practice — known as a structured deficit — doesn’t mean the city is running low on funds. What it does mean if expenditures aren’t eventually brought into line with revenue by reducing costs, generating new income or a combination of the two the city could ultimately deplete its reserves.

The last time that came close to happening was in the early 1980s when the general fund reserves were just barely more than $1,000.

That triggered severe belt tightening. It included leaving a then just finished fire station on Louise Avenue closed because the city could not afford to staff it even though they were running two-man engines at the time which meant six instead of nine firefighters for 24/7 staffing of an engine company.

Police were forced to secure replacement vehicles from the state that were used CHP vehicles with 90,000 plus miles when city patrol vehicles needed replacing.

The budget update at Tuesday’s council meeting comes as the finance department continues to unravel financial accounting snafus in a bid to obtain a clear picture of municipal finances to make sure money is being credited to proper accounts and interfund borrowing that took place is being repaid.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com