The city of Murrieta is poised to use nearly $1 million in economic contingency reserve funds to get through the fiscal year that begins July 1.
Murrieta city council on Tuesday approved an operating budget for the 2012-2013 fiscal year 3-0 with two members absent. The budget shows $32.9 million in general fund revenue, with $34.43 in expenditures.
The city plans to pull $970,000 from of an economic contingency reserve fund set aside several years ago by city council, according to Director of Finance Joy Canfield.
There is $3.7 million left in that reserve fund, which Canfield said is being used sparingly.
"This is consistent with the five-year plan to utilize the economic contingency funds to help provide services as much as possible with the hope that the economy will begin to recover," Canfield said, in an email to Patch.
Separate from the economic contingency reserves, the city also holds a 25 percent reserve fund to be used only in the event of a catastrophic natural disaster, Canfield said.
The budget gap was not news for city council, who had reviewed the numbers during a May 15 workshop.
That same week, eight full-time workers and six part-time workers. Five vacancies created by retirements will not be filled, bringing the total recent reduction in staff to 19.
Major impacts on the 2012-2013 budget have been the elimination of the redevelopment agency for a loss of about $500,000, and the state takeaway of vehicle license fee revenue for a loss of about $350,000, Canfield said.
Negotiated city employee contracts were also expiring, she said.
Since the economic downturn began in 2007, the city has seen a $10 million loss in general fund revenue—a drop of 26 percent, according to a staff report.
Sales and property taxes make up about 73 percent of general fund revenue. A six percent bump was expected in sales tax revenue, Canfield said, but the city expected property tax revenue to remain flat.
The city's budget for all its funds, including Fire Department operations, was figured with $62.78 million in revenue and $66.13 million in expenditures. This was down from $80.29 million in operating expenses in 2011-2012.
Fire Department revenue—funded by a special fire tax on property—has dropped nearly $3 million since 2008-2009, Canfield said. That is a decrease of about 24 percent.
"Which is great for the property owner because they don’t have to pay as much but it makes it hard to keep up the fire services," Canfield said.
Additional cuts may need to be made to fire services if the city does not identify new revenue, she said.
The $970,000 in contingency funds to be put toward the general fund in the coming fiscal year is down from $1.7 million used last year, city officials said.
Staff is continuing to work on solutions, which include ongoing negotiations with labor groups, according to a staff report.
"The one thing we’re doing that is absolutely critical is the five-year plan," said City Manager Rick Dudley. "Things could be a lot worse if we weren’t doing the long-term planning."