Manteca municipal employees might get their first increase in pay after taking an average reduction of 20 percent five years ago.

When the workers made concessions to help the city ward off financial disaster as well as help retain as many municipal jobs as possible to minimize impact on services, an agreement was put in place on how some of that money could be restored.

The agreement with the city’s bargaining groups directs increased revenue in property and sales taxes to go first to cover any additional retirement costs for city employees enrolled in the California Public Employees Retirement System (PERS).

Contract language calls for half any net annual increase after that of over one percent in combined property and sales taxes to be split among the employee bargaining groups to determine how they’d like it applied to compensation — salary or benefits — within their units.

The contract language was aimed at stabilizing the general fund to eliminate the city’s structured deficit. At the same time it increased job stability for city workers by helping to partially insure the city can handle retirement cost increases as they occur. Pension payments are a major part of the municipal budget. Getting retirement and health costs under control is an essential key to keeping Manteca’s municipal budget on even keel.

Manteca takes in roughly $16 million a year between property and sales tax based on the city’s fiscal budget document. A one percent jump would represent about $160,000.

City Manager Karen McLaughlin emphasized that it “appears” property and sales taxes have increased enough based on preliminary unaudited figures. She cautioned the numbers that count are audited figures. The contract ties any increase in employee compensation to audited numbers for both property and sales taxes.

The growth in property and sales tax is credited to the recovering housing market and consumer spending exceeding the city’s projections.

Stronger-than-expected tax revenue in the current fiscal year may also allow the city to eliminate the structured deficit.

The spending plan as adopted projected expenses as of June 30 would exceed revenues by $150,000. The city has money in reserves to cover that shortfall.

A structured deficit occurs in any year where current year revenues exceed current year expenses. Manteca has spent over $12 million in reserves over the past eight years to cover years that had structured deficits.