$1 billion Fresno city budget approved

Published online on Friday, Jun. 26, 2009

Fresno's City Council approved a $1 billion budget Thursday that trims expenditures by 2.5% to cope with a recession-induced drop in tax receipts.

The vote ended a budget season marked by few arguments but much agony over an anticipated 2.2% drop in general fund operating revenues. And the agony may not be over.

Depending on what happens in coming weeks in Sacramento, where the Legislature and Gov. Arnold Schwarzenegger are debating a $24 billion state budget gap, city revenues and the spending they support may face still further cuts.

Nevertheless, Mayor Ashley Swearengin hailed the council's 5-2 vote even as she acknowledged the threat looming from the state Capitol.

"Let's celebrate this moment and let's keep focused on making sure that the Legislature and the governor know our position on our local revenues staying put," Swearengin said after the vote.

Council members Henry T. Perea and Mike Dages cast the "no" votes to protest cuts of about 10% in the Fire Department. Most of those cuts are to be achieved by reducing staff on some vehicles, and deploying them elsewhere to reduce overtime. The council restored some of the funding Tuesday by shifting money from other departments.

The council also approved an agreement that cuts costs this year by delaying a 2% raise for rank-and-file police officers that was scheduled to go into effect Tuesday. The agreement also places new limits on taking holiday pay in cash. Together, delaying raises and limiting holiday pay will cut costs almost $5 million, the council was told.

In return, police officers will get a series of raises of 2%, 1%, 2% and 1% between July 2010 and January 2012, as well as an increase in vacation pay. City officials said the extra costs were already included in their long-term budget projections.

Council members voiced relief at the end of their month of budget hearings but were well aware that they could be back soon. Besides the prospect of reduced revenue from Sacramento, the city also remains in negotiations with other public employee unions over concessions to save money. The outcome of those talks could affect city spending.

The biggest concern, however, is whether the state will seize two gas taxes that now go to local governments. The resulting hit to Fresno's budget, if that happens, is estimated at $9.4 million, a figure that City Manager Andy Souza said would likely result in layoffs.

"If we reach that point we would probably be eliminating positions which would have a person with them," rather than just leaving vacancies unfilled, Souza said.

The $1.06 billion budget includes $226.6 million for the city's general fund, which pays for police, fire, parks and other basic services.

Most of the rest of the money is in self-supporting "enterprise" accounts such as utilities.

After the Fire Department changes and other late amendments by the council Tuesday, the new budget ended up about $85,000 in the red. That deficit is expected to be addressed in August. For now, however, the majority was satisfied with its work.

"As much as I would have liked ... to have presented the mayor with a balanced budget, this is pretty darn close," Council Member Andreas Borgeas said.