By CLARK MASON
THE PRESS DEMOCRAT
On the positive side, Cloverdale expects to have a slight surplus in its $5.2 million general fund at the end of this budget year, following an earlier prediction of a $69,000 shortfall.
But the negative news is that over the next five years, the forecast is for growing deficits each year — even larger than projected in late April, the last time city officials crunched the numbers.
The deficit at the end of 2012-13 could be $341,000 and by June 2016, it is projected to be $2.3 million.
For a city with only a token reserve fund of $30,000, it’s a sobering picture.
“It’s a cautionary tale,” City Manager Nina Regor said Wednesday, adding that the forecast is not necessarily an accurate prediction.
“You can increase revenues, or decrease expenditures, or have a combination of the two,” she said.
For now, revenues are down, primarily because of lower property taxes, as well as decreased transfers into the general fund from other sources.
While sales and property tax revenues may increase slightly in the next few years — at around 2 percent — the money apparently won’t be enough to offset other costs.
Employee salaries and benefits are expected to keep increasing at 5 percent annually.
Regor’s report presented to the City Council on Wednesday is the basis for a draft 2011-12 budget the council will consider at its Sept. 28 meeting.
With some tentative concessions from Cloverdale’s 45 employees, the general fund is expected to be in the black for the fiscal year ending next June.
“Although not finalized, we have been negotiating with employees on various concessions, primarily pertaining to sharing in the cost of premiums for medical insurance and for sharing in the cost of PERS (pension) contributions,” she said.
Over the past several years, Cloverdale trimmed its workforce by 18 percent as sales and property taxes plummeted.
City employees have not had raises for more than a year and no cost-of-living increases are proposed in the new, two-year contracts with employee groups.
Regor said she plans to leave a couple of positions vacant, including for a city utility worker and a police dispatcher.