Manteca is now poised to spend only $5.6 million of general fund reserves to cover the cost of day-to-day municipal services such as police, fire and street maintenance in the current fiscal year ending June 30, 2022.
That’s $2.2 million less than the city expected to draw down reserves when the council adopted the 2021-2022 fiscal year budget in mid-June.
The budget revision will be presented by Accounting Manager/Acting Finance Director Jared Hansen when the City Council meets tonight at 7 p.m. at the Civic Center, 1001 W. Center St.
When the council adopted the budget last month, staff advised that revised numbers would be presented in July as more work was completed cleaning up long-term accounting snafus uncovered in 2020. They noted additional such revisions may be needed in the coming months as the finance department clears up issues.
Neither the spending plan nor the budget revenue reflects the $13.9 million the federal government is sending Manteca’s way in the form of COVID-19 relief. Staff is planning a council study session with the council to devise a spending plan for the relief funds.
The relief fund spending plan that will emerge at an upcoming workshop is likely to be a debate of sorts on the city’s general fund reserve policy.
Based on the fact general fund spending is expected to exceed revenues by $5.6 million in the next 12 months by drawing down on reserves, staff is likely to recommend backfilling general fund reserves with $5.6 million of the $13.9 million based on the currently adopted council reserve policy.
Mayor Ben Cantu has made it clear he believes the current reserve policy is overly conservative. Cantu has advocated cutting it back the fiscal stability reserve for cash flow and contingencies to 20 percent of the overall general fund budget. It is now at 25 percent.
Cantu, however, has not garnered any support from council colleagues to whittle back the percentage of targeted revenue to set aside as a financial cushion for emergencies, unexpected expenses, or economic downturns.
General fund expense estimates in the budget revision were increased $3.4 million to $51.6 million. Expected revenue was up $5.7 million to $47.5 million. That leaves a structured deficit being covered with $5.6 million in reserves.
The overall budget covering restricted funds such as grants and growth fees along with enterprise accounts covering water, solid waste, and wastewater service plus the general fund is being adjusted upward as well.
There is now $9 million more in revenue expected and $6.1 million more in expenses. That brings the overall projected revenues to $167.9 million against estimated expenses of $147.5 million.
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