City staff proposes $31.6 million general fund budget - Morgan Hill Times: City Local Government

City staff proposes $31.6 million general fund budget

Proposal adds new staff positions and targets street maintenance

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Posted: Monday, May 13, 2013 2:53 pm

Morgan Hill’s city manager has proposed a budget for the coming year that increases general fund expenses to $31.6 million, adds the equivalent of 3.5 staff positions to City Hall and uses about $750,000 one-time property tax revenues to pay for improved maintenance for the City’s beleaguered streets infrastructure.

City Manager Steve Rymer’s “budget message” to City Council, published Friday with the budget proposal, says the general fund revenue outlook is more positive for 2013/2014, which starts July 1, than it has been in previous years. That’s due to climbing sales tax revenues and a one-year burst in property tax revenues pumped into the City’s coffers by the dissolution of the Redevelopment Agency, which formerly grossed about $22 million per year. That money is now redirected by the state to fund basic local services.

“Moving forward, all indications show that the economic recession is behind us as Morgan Hill is once again experiencing economic growth,” Rymer’s budget message reads. “This is primarily the result of a significant increase in sales tax, property tax and increased building activity.”

While local property tax revenues (about $8.3 million total in 2013/2014) are expected to drop by 11 percent by 2015, City staff still expect overall general fund revenues to climb steadily over the next five years, from a projected $30.8 million in 2013/2014 to about $34.4 million by 2017/2018, Rymer said. Sales tax revenues are expected to exceed property tax collections by 2015.

Though the proposed total general fund expenditures of about $31.6 million are higher than 2012/2013 expenses by about $3 million, City staff still think the improving revenue picture will allow the City to add to its reserve fund each of the next five years. Rymer’s proposed 2013/2014 budget projects the year will end with about an $8.5 million general fund reserve - up from the $7.1 million expected at the end of the current fiscal year.

As is typical of the City’s budget, the vast majority of the general fund - about 82 percent of expenses - is devoted to public safety, with a police department budget of about $13.4 million, and a fire services budget (mostly consumed by a contract with provider CalFire) of about $5.1 million, according to City staff.

The proposed police budget adds an “administrative sergeant” position, bringing the department’s total sworn staff to 37, the budget proposal states. The budget also includes funding to fill an officer’s position which Council previously elected to keep vacant during the current fiscal year.

Other new public safety improvements proposed in the 2013/2014 budget are an investment in new street signs to improve their readability and enhancing fire safety by visiting schools and promoting fire station tours, according to the budget proposal.

The budget also proposes using $750,000 of the $1 million in extra property taxes - generated just this one year by the state-mandated Redevelopment Agency wind-down - for needed streets and sidewalks repairs, the proposal reads. This expense is in response to the increasingly apparent deteriorating condition of the City’s streets infrastructure, which was confirmed earlier this month by an independent study that says the City in fact needs to spend at least $2.4 million more, per year, than it currently spends on maintenance of the infrastructure in order to reach a “safe and sustainable” level.

Other new positions proposed in Rymer’s 2013/2014 budget are intended to improve administrative services and public outreach, as these services are currently understaffed at City Hall, Rymer’s budget message states.

These positions are a “communication and engagement manager” who will “provide organizational leadership” starting Jan. 1, 2014; a part-time human resources assistant; a part-time management analyst in the City’s streets and parks maintenance divisions; and a part-time administrative services assistant, the budget says.

The additions to City staff will increase the payroll from 169.5 to 173 positions, according to City staff. In recent years, the Council has made significant cuts to the payroll, which was up to 189 staff people in 2009/2010.

The budget proposal will be presented to the Council at Wednesday’s meeting, 7 p.m. at Council chambers, 17555 Peak Ave.

The Council will continue to study the budget and propose changes at upcoming workshops and public hearings in the coming weeks, with final approval of the 2013/2014 budget scheduled for June 19.

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