Reserve Funds Keep City of Murrieta Afloat

Economic contingency funds were expected to carry the city through if spread out over a five-year period.

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."

Thomas Blair June 25, 2012 at 08:48 AM
Second, when you ONLY consider federal employees you will find that there is a huge pay gap between public and private workers. According to the WP from Nov 2011 the difference for Federal employees versus their equivalent in the private sector is 26.3% (http://www.washingtonpost.com/politics/federal-pay-gap-widens-report-says/2011/11/04/gIQArDeFnM_story.html?wprss=rss_business&wpisrc=nl_wonk). If the private secotr employees base salary was $50k a year then that means the public employee takes home $36,850. Third, as Mr. Cline said above, the ONLY thing keeping the economy from recovering right now are the massive losses in the public sector. Since Obama took office there has been a LOSS of over 630,000 government jobs. Those people, teachers, police, firefighters, etc. no longer bring in a paycheck and therefore do not go to movies or dinner (http://www.washingtonpost.com/business/economy/threat-from-mounting-public-job-losses-tested-obamas-economic-strategy/2012/04/29/gIQAhJpMqT_story.html). How do you think this affects the economy as a whole?
Thomas Blair June 25, 2012 at 08:50 AM
I am not necessarily disagreeing with you but I would like to see where you get your numbers. How do you know that it will double or triple?
Rob June 25, 2012 at 11:19 PM
Hello Tom: We all understand property values have dropped, commercial spending is down, development is flat-lined and so are most sources of revenue for the City. I think the people are clear on this matter, new revenue sources are not going to be made available via a tax. In this horrible economy, what are the biggest challenges, cost wise, to the City? What are the short-term hardships/cuts and the long-term solutions? We hear so much about the unions influence and we see that 35% of the city staff (including clerks, librarians, 70 police, over 40 firefighters, assts to City level top staff, etc) making over $100,000/year and we (me being one of them) begin to look at the city as having an insatiable appetite for our hard earned dollar. How do you propose we find a balance between the need for fiscal restraint and the maintenence of the common need civil services?
Thomas Blair June 27, 2012 at 02:59 PM
@Rob - As Mr. Cline pointed out previously, how else does the City propose to recruit and keep top talent? Maybe the government employees here in the City of Murrieta are sub-standard? Maybe they are lazy, gadabouts wasting heaps of City money on trivial parties and events? I have only lived here a couple years and it has not been my experience that the City employees are stupid and unworthy of their positions (but then I have only interacted with a handful). For those of you who want government to act like a Private business, first, understand that "A Country is not a Company" (http://hbr.org/1996/01/a-country-is-not-a-company/ar/1). Second, what is more like the private sector than incentivising talent to come and work for you over a competitor? Those that complain about public sector pay seem to suffer from the "Crab Mentality" (http://en.wikipedia.org/wiki/Crab_mentality) or just plain "Sour Grapes" (http://en.wikipedia.org/wiki/Sour_grapes). Don;t get me wrong, there are exceptions, but since when do we make rules that treat everyone like the exception?
Rob July 02, 2012 at 04:08 PM
Forget the discussion on Party affiliation(they both suck). It seems those who earn a living name call anyone who is looking at cutting costs. I love how people say it is sour grapes if you think the Librarian, at $120K may be over paid. Or how you question a City Clerk earning a $100K. Dare speak of Chief Wright's last year @ 250K, his pension or his SUING of the city for additional severance and you must be posting from a coffee shop w/o a job or sniffing glue and stalking old ladies for their social security check. The reality is Murrieta is using RESERVE funds to keep the City running. The POLICE DEPT is 67% of the budget. The POLICE DEPT sent Vallejo into bankruptcy and the over-all cost of public service has driven voters to DEMAND reform in San Diego and San Jose. The economy is NOT coming back any time soon. We must look to be fiscally sound in a very tough economic climate. Signing a 5-year extension with the Murrieta PD must now be called into question. The big, announced, concession, is the delay of a 6% increase in pay for this contract year. "Delay!" How many out there are getting any kind of raise? Will the PD get a 12% increase in pay in 2013?! the details of this agreement may just make or break the City. We the people need to look at this budget before local taxes skyrocket (leading to a BK) to pay for services we can obtain at a lower expense, with a smaller retirement obligation.


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