Fresno's budget shortfall is getting worse, the city's top budget official told the City Council on Thursday.
Budget director Renena Smith said the city had expected to carry a $10 million surplus from this year's operations into the next budget year, beginning July 1. She now estimates that figure will be $7.75 million less, or just $2.3 million.
There was little discussion among council members after Smith's presentation.
"I thought it was going to be worse," Council Member Lee Brand said.
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Mayor Ashley Swearengin said outside the council chamber that layoffs and reductions in services are all but inevitable.
"We're certainly feeling the pain, but I can assure you we have a plan," Swearengin said.
However, Swearengin declined to reveal details, saying the 2010-11 budget will be unveiled in early May.
Swearengin said public safety and other core services are the highest priority. She said she wants to avoid a reduction in the number of sworn police officers, whether from attrition or layoffs.
Swearengin said the 2010-11 fiscal year "will be very difficult," but city finances should stabilize after that.
Smith's announcement is the fourth time in the past year that City Hall has announced budget problems. The most recent was in November, when Swearengin unveiled a plan to close a $28 million budget gap through June 30, 2011, that included more than 100 layoffs and furloughs.
Smith said the $7.75 million projected gap in the general fund is due to a $4.2 million drop in revenues and a $3.55 million jump in expenses.
Sales tax revenue is expected to be $2.4 million less than projected.
Other expected revenue drops: $800,000 in business tax, $1.1 million in room tax, and $1.24 million in charges at Public Works.
Smith said it's a good sign that projected property tax revenue of $69 million shows no change from earlier estimates.
The higher expenses were due in part to an increase in unemployment expenses and employee leave payouts.
In other action, the council:
Voted 4-3 to let voters decide whether to put off a charter-mandated expansion in the number of council seats from seven to nine. Council members Mike Dages, Henry T. Perea and Cynthia Sterling voted no.
Unanimously approved a contract amendment with Fresno Chaffee Zoo Corp. that has the zoo paying the city's share of costs for an environmental report necessary for zoo expansion. The city will reimburse the zoo by July 2011. A side agreement relieves the city from paying costs to defend any legal challenge to the report.
By a 6-1 vote, adopted an ordinance regulating solicitations from median islands. Council Member Cynthia Sterling voted no. The ordinance goes to Swearengin for her signature or veto.
By a 5-0 vote, approved an amendment to the parking agreement with the downtown Holiday Inn that defers parking fees in a city garage for up to six months. The hotel will begin repaying the fees when occupancy hits 60%. Council members Henry T. Perea and Andreas Borgeas were absent.The higher expenses were due in part to an increase in unemployment expenses and employee leave payouts.