The proverbial rainy day arrived three years ago at Manteca City Hall.
Since then the city has spent well over $4 million in money set aside as reserves in order to balance the general fund balance. They tossed in $1.2 million of interest on unrestricted funds collected over the years to oversize infrastructure for growth. That was in addition to burning through $12.2 million in bonus bucks collected from developers to issue sewer certainty for new homes.
“The reserves definitely helped smooth the impact of the recession on our citizens in terms of being able to keep municipal services going,” noted Manteca Mayor Willie Weatherford.
The general operating reserves were pegged at well over $1 million five years ago before the Great Recession started. The city has projected they’d have $24,000 left in general reserves when the next fiscal year ends.
Reserves - cushions against unforeseen financial needs - have worked for Manteca as Weatherford noted.
The general fund also has an emergency reserve as a cushion for unexpected capital expenses to replace vital equipment or for major emergencies such as the 1997 flooding response. It also serves as a cushion against unanticipated revenue losses. That emergency reserve had been at $1.9 million for years. It was bumped up to $2,863,000 earlier this year with the sale of land to the Manteca Redevelopment Agency for the construction of the transit station on Moffat Boulevard.
Weatherford said he believes the budget to be presented later this month to the council “will be the best budget since I’ve been on the council” in terms of fiscal responsibility.
That’s because the structural deficit will have been eliminated through compensation concessions. Salaries and benefits of municipal workers account for 85 percent of the budget.
The city has had a structural deficit in 11 of the past 12 budget years.
Weatherford said the city will be able to build on a realistic budget when revenues do increase.
“When times were good no one worried much about the structural deficit because we always had increasing revenues the next fiscal year to take care of things,” the mayor said.
In reality, if it hadn’t been for the bonus bucks adopted at the cusp of the 21st century that developers embraced to solve problems with too many requests to build homes compared to available sewer allocation the city would have had major cuts in municipal services years ago.
Weatherford noted the outlook is strong for revenues from property and sales tax to stabilize putting Manteca in fairly solid ground over the next four years. That assumes the state doesn’t try to take general fund money as they have in past years.
“It looks like the worst of it (the economic downturn) is over,” the mayor added.