The 5-0 vote gave the go-ahead to a $158.5 million overall budget for fiscal year 2012-13, which begins July 1.
Included in that figure is the $49.9 million general fund — the part of the budget that pays for police, fire protection, parks and other services. It will be supported by $2.2 million in reserve money, drawing those reserves down to $23 million.
The city predicts only $47.7 million in general fund revenue for 2012-13.
The anticipated shortfall is larger than that of 2011-12, when the council approved a general fund that was $1.4 million in the red. It’s still smaller, though, than the $5.3 million deficit of 2009-10.
The deficit grew from 2011-12 to 2012-13 despite a boost in sales tax revenue from Measure E, the half-cent hike in the local sales tax approved by voters in 2010.
In 2012-13, Tracy Finance Director Zane Johnston expects the special sales tax to generate $5.8 million for the general fund; it brought in about $5.4 million during the present fiscal year.
In previous meetings, Johnston blamed several factors for the deepening deficit, including an increase in the city’s contribution to the state pension program and the expiration of certain concessions from city employee groups.
He added Tuesday that since Measure E was passed, the city had lost an additional $1.2 million in annual property tax revenue, a trend that is likely to continue.
County Assessor Kenneth Blakemore confirmed in an interview that next year’s property tax rolls are likely to decline.
“Measure E was never contemplated to take the place of a continually eroding tax base,” Johnston said, but rather was meant to give the city time to balance the budget for the 2015-16 fiscal year, when Measure E expires.
On Tuesday, Johnston said many steps, including reducing the number of city departments from nine to six and instituting an early-retirement program approved in October, should yield more savings in 2013-14.
“It is a transition budget,” Johnston said. “There are some things put into play here where we’re only receiving half a year’s savings.”
As a source of hope for a balanced budget, he pointed to new business and industrial developments that would pump up the property and sales tax base.
“In the end, perhaps one of the things I know can help this community and help balance our budget, and where we’re putting a lot of effort, is economic development,” Johnston said.
New projects on horizon
The council also approved a $21.89 million capital improvement budget, funded by money that can be used only for one-time projects.
For a list of those items, check back at www.tracypress.com, or read the Friday, June 8, print edition of the Tracy Press.
In spite of our lower cost of living compared to more urban areas, Tracy was among the local governments that opted to pay maximum rates.
Executive management pay and benefit packages are also excessive. Tracy City officials earn compensation that equals or exceeds that of similar positions in high cost counties surrounding SF Bay and, thus, enjoy lifestyles that public officials in other cities can only envy.
Were it not for the Tracy budget reserve, we'd be reading about a Tracy City bankruptcy already.
Until there are real changes, Tracy and most California cities will pay far to much for the safety services they receive, we'll pay too much for public management, other public services will be curtailed, and municipal bankruptcies will appear in the headlines.
It seems to be a characteristic of American governance in the 21st century that things need to get really, really bad before our citizenry becomes engaged and our elected officials are motivated to seek meaningful solutions.
Real estate and the associated industries built and carried this town for many years ... not their fault that the city government grew and expanded at a rate that exceeded future growth!
The real issue is what was facing the cities and towns of Wisconson ... difficulity in changing existing labor contracts, even when revenues into the city are falling like a rock.
thats why prop 1 was a fools game ... anyone that believed that it would fix anything was delusional.
Like Scott Walker, a government leader (jerry brown???) needs to step in and strip the collective bargining rights from the municipal unions ... it has gone far enough. The voters in San Jose, San Diego, and Wisconson have spoken ... the world view is changing and it is tipping against the public employees (not really them but thier unions)...
If the city doesn't have the money they cant go to the taxpayer ... they need to shrink the size and scope of the government ... Period!
I meant measure e, not prop 1 ... sorry...but you get it!
http://www.ci.tracy.ca.us/documents/20120403_HANDOUT.pdf
You don't have to hope. You have to make tough decisions based on solid financial analysis and execute a plan. Clearly wanting more taxes (looking for increase in sales and property tax base) instead of cutting spending. Let's see how well that works for them. Treat yourselves to Zane's comments in the past few budgets and then re-read this article. Pretty laughable really.
Employee concessions expired? Really? Go back to the bargaining table and show them the numbers. Unions like numbers and are often quick to say that the employers don't share the numbers. Well, there is more red ink. Not the time for concessions to expire.
The recession hasn't gone anywhere.
At least now they recognize that help won't be forthcoming from property tax. What is this "economic development" that they are now pinning their hopes on? That big Amazon warehouse? Oh, wait, that went to Patterson.
Exactly whose concessions are expiring? Regular city workers or police and fire? The real inflation rate is between 8% to 10%. Regular employees have taken a huge hit. Police and fire make up what percentage of the total city budget? That is where ultimately we have to look as we continue to spiral down in revenues. Not to pick on them, but that is where the money goes.
"When is the city going to wake up to the fact that there is no need to follow through on the Ellis deal, since the developer has yet to place his $10,000,000 on the table?"
It seems Mr. Helm has a sound view of how to fix the city's problems. Maybe he should run for Mayor and help clean up this town?
Now Tracy is forclosuretown USA and tax revenue is out the window.
This is what happens when your city council is bought and paid for by real estate developers.
You think those developers want to help Tracy when it is down? Nope, not unless there is money to be made.
Could you be bothered to supply documentation or cites supporting your claim ? Thank you in advance for what we are about to receive. disclaimer: The value of the thank you is proportional to the documentation we await :-)
"...You think those developers want to help Tracy when it is down? Nope, not unless there is money to be made."
Take this opportunity to publish your list of contributions to the town...
developers have contributed much... the economy affects all, not just the ignorati.
When most of us say that, what we mean is that in an era of stagnant or decreasing wages and increasing costs, we reduce our expenses so that they don't exceed our incomes. We don't mean
* Getting loans to tide us over in the hopes that 'someday' this will change.
* Robbing our retirement savings for the future so we can live good NOW.
* Going out to our neighbors and asking them for their money to augment our own so that we can continue living the lifestyle that we used to have.
You are assuming that this is just a longer version of the recession cycles that we've seen come and go since the 1950's. Such an assumption is unwarranted due to the fact that we've lost our manufacturing base and have also made our currency worthless. Things are NOT going to get better until we basically reset our entire financial system. A service-job economy simply does not generate the tax revenue that a manufacturing economy does. Government expenditures HAVE to shrink.
Interestingly, America didn't "lose" it's manufacturing base. Essentially, they gave it away because it is too expensive to do manufacturing here in America. I'm sure you can tell us why. But PC's are commoditized. You can buy one for less than $200.
If the economy needs to expand, all you have to do is figure out how to practically manufacture things consumers want, for next to nothing and create a networked economy. Social media. The cloud. Etc.
You suggested a "serviced based economy" will not generate as much revenue as a manufacturing based economy. The only service based economy in America that created jobs could be exemplified by pointing to Florida's Space Coast. And that's all gone now. But interestingly, that was created by government spending. Why? I'm sure you can explain.
But NASA is gone now. And American companies tend to coagulate where there is money to be made, shedding business units that do not make revenue (and selling entire business units overseas, as easily as we unload a used laptop or a used car, online).
The more pertinent question you should ask is a lot simpler. Will the networked economy be commoditized and moved overseas too? If so......