Clovis News

After 2 years of cuts, Clovis budget stabilizes

After two years of cuts and last year's layoffs, Clovis City Council members were told Tuesday night that the city is -- for the most part -- meeting its budget estimates this year.

That means additional cuts and layoffs are unlikely.

In the past two years, the city has slashed more than $8 million from its budget.

Clovis City Manager Kathy Millison said the cuts helped the city become stable. Even so, "nobody is sure we have really hit the bottom," she said.

Overall, the city is in a better financial situation than last year, said Assistant City Manager John Holt.

"We are actually in a pretty good position considering the cuts that we made over the past two years," Holt said. "Our performance is pretty much what we budgeted."

But looming state budget problems make the future appear murky.

"It doesn't put us in a position to know what we are going to be looking at for next year," Holt said.

A five-year financial forecast will be presented to the City Council in March. During that discussion, the council will be told that the city needs rate increases to bolster its sewer fund.

A 20% water-rate increase went into effect in January, and city officials will examine a sewer-rate increase starting in July.

The city is examining different scenarios, but the rate increases could be similar to those approved for water last year, said Robert Woolley, the city's finance director.

The reasons for the water- and sewer-rate increases are the same: The increase will bolster the city's sewer enterprise fund, which pays off the cost of bonds and -- because of slower new home construction -- is in danger of falling below where it needs to be. The bonds pay for the city's sewage-treatment and water-reuse plant, which opened last year on Ashlan Avenue, west of McCall Avenue.

During the project-financing process, the city arranged a $10 million sewer-rate stabilization fund, a buffer for city customers that was put into place if new development slumped for a significant period. When it was approved, the city had averaged more than 1,000 new homes per year for several years.

The fund will be nearly depleted this summer after three years in a row of fewer than 310 new homes being built. To keep the fund at $10 million, the city needed to average 750 homes per year, Woolley said.

Additional water rate increases will be: 15% in July; 15% in July 2011; and 5% in July 2012.