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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."

Harvey Mushman June 23, 2012 at 01:53 PM
Riverside County Sheriff's is knocking on the PD's back door.
Johnny June 23, 2012 at 02:34 PM
Let's hope not. The crime rate will double.
Jon Sims June 23, 2012 at 03:01 PM
Tell you what James, if you really feel that way, good for you, no one is stopping you from donating money to the city.
BRUNO TRAVANTI June 23, 2012 at 04:00 PM
extremes on both sides of the aisle are caustic....reason and moderation is the ticket!
Jackson June 23, 2012 at 05:20 PM
just say no to RSO!!! You are right, crime will double if not triple!!
AFR June 23, 2012 at 06:21 PM
Last I checked, Temecula contracts with RSO and they were the 2nd safest city while Murrieta was the 4th. Not taking anything away from our cops because I think they do a good job and I don't want our city to contract out for public safety, but I'm just trying to calm Johnny's nerves. From the article; "Similar rankings compiled by Business Insider showed Murrieta as the No. 4 safest city in the U.S.; Temecula was No. 2. Business Insider bases its rankings on four violent crimes: murder or non-negligent manslaughter, forcible rape, robbery and aggravated assault, per 100,000 people." http://murrieta.patch.com/articles/report-murrieta-no-7-among-cities-with-lowest-crime-rates
Wendy Caballero June 23, 2012 at 06:48 PM
I agree.. If we can afford it, let's say no to RSO!
Michelle Deskin June 23, 2012 at 09:15 PM
Wow! Our forefathers fought for freedom, for us not to be double taxed as we are today, and our right to bare arms( 2nd Ammendent) Double taxation without representation is running rampant everywhere..... We get taxed in our paychecks, we get taxed from the same money at the gas pumps, at the grocery stores, when we get money back from our income tax returns, at department stores, etc... taxes, taxes, taxes. They go up & up & up, that's what conservatives are fighting, the hundreds of dollars the government takes away. Cities need to learn to cut salaries, have employees pay into their pensions like the public sector does & only match their pensions up to 8% of what the employee puts in & have government employees pay $15,000 for medical insurance alone every year like we do & then also pay for dental, eyecare, ad&d, ad, etc...Up to $20,000 a year for benefits when you only have a $60,000 job. Cities that have a $50 plus million budget, that's outrageous!!! Hundreds upon thousands of people are losing their homes, cars, jobs, jobs, jobs and the city is complaining that $50 plus million dollars a year isn't enough money to run a city, really???? Shame on cities for not really trying hard like Wisconsin did by cutting taxes, cutting budgets, cutting salaries, pension funds, benefits, etc like the people they serve have had their pensions cut or erased, vacation time cut, benefits cut or non existent, etc, etc, etc . salaries, benefits, etc.... have a
Bill June 23, 2012 at 09:58 PM
The worst thing that James could possibly do is convince conservatives he is right WHO WILL PAY THE BILLS
Lynda StarWriter June 23, 2012 at 10:14 PM
Kudos to the City Council for approving an operating budget! It must have been a difficult task. I believe Murrieta's city reps are doing the best job they can under the duress of uncertain economic circumstances -- which may have preceded their current posts. I also believe they (collectively or no) have decided on viable, however, painful solutions by looking at the COLD, HARD, CITY FINANCIAL FACTS AND FIGURES which must be shared with constituents --- that's the SMALL, LOCAL PICTURE -- much easier (for me) to digest than global / political party generalizations. Not to detract from what I've learned here as the remainder of the discussion is appreciated and nostalgic -- it reminds me of grad school discourse in economics: Guns and butter; supply and demand -- all things being equal AND INCESSANTLY DYNAMIC.
D June 24, 2012 at 12:50 AM
Thank you city staff and council for working to survive this economic downturn responsibly. I do appreciate it.
Tom Courbat June 24, 2012 at 01:26 AM
Michelle, Have you even LOOKED at the printed budget for the City of Murrieta? You think $50 million is "too much"?? Really? Based upon what? Murrieta doesn't get the high rankings by NOT spending money on its citizens - we should all be VERY proud of the city leaders who generally have the best interests of the citizens in mind. Are there some exceptions? Sure - like in any organization. But on balance, I am proud to be a citizen of the City of Murrieta and to tell people where I live. You just don't seem to have any clue as to how difficult is has been for local government to maintain vital services to its citizens while revenues plummet year after year. Take a couple of courses in how local government operates and come back and tell us what you learned. - Tom Courbat, former Finance Director for County of Riverside.
Mr. Logical June 25, 2012 at 06:20 AM
Murrieta is a beautiful city to live in. Keep up the good work.
Thomas Blair June 25, 2012 at 08:47 AM
Well said Mr. Cline. Ordinarily I would feel compelled to jump right into this but it is late and I have to be at work by 7:30AM. So, in lieu of a rant I will simply provide some evidence for James' points. First, it is a conservative/libertarian myth that public sector employees make "too much" or even more (taken as a whole) than private sector workers. As a whole the public sector makes about 3.7% LESS than equally educated private sector employees. Mind you this is when you take ALL public sector workers, state, local, and federal (https://docs.google.com/viewer?url=http://www.epi.org/page/-/pdf/bp276.pdf&hl=en_US&embedded=true).
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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