By Dave Roberts
The good news is that the Antioch City Council, which not long ago feared the city may be headed for bankruptcy, approved a $34.4 million operating budget Tuesday night that provides a healthy 15 percent reserve fund for the fiscal year starting July 1. The bad news is that the year after that, the budget is facing a $1.8 million deficit as employee pay and benefit concessions expire.
“With minimal revenue increases projected and many of the agreements with our bargaining groups triggering pay increases as well as expiring, we find ourselves with the potential of outpacing our revenues once again,” warned Finance Director Dawn Merchant in her budget report. “The City must begin to face the challenges in 2013 immediately.”
Council members are cautiously optimistic as they prepare for a budget study session on July 19 to begin facing those challenges.
“I feel really good about where we are today,” said Councilman Gary Agopian. ‘We have stability, but it’s momentary stability. What I’m very concerned about is projections for the future. We don’t want to lose the progress we have made on this budget.
“This success did not happen in a bubble. It’s taken hard working, intelligent, creative individuals in the city and every level of the organization from the bottom to the top for being successful in a very, very difficult time.
“If we can navigate through some shoals in the river and get through the next few years with stability we will be able to leverage much better in the future. Revenues are flat. I don’t see how sales or property tax will increase significantly. We are looking at a reserve number that is healthy. It’s not hefty but it’s healthy. We need to stay healthy going forward.”
The budget assumes that there will be a 5.5 percent increase in the sales tax in the coming year but that property tax revenue will not increase. The exact property tax figure will be released by the county assessor next week. The budget also assumes that the employee union wage and benefit concessions will remain in effect for the next year. That includes $501,456 in savings from employees paying a portion of their retirement costs.
One of the unknowns is how the elimination of the city’s redevelopment agency by the state government will affect the city’s finances. It could result in a $600,000 hit to the operating budget for services that have been picked up by the redevelopment agency. That would still leave the budget with a relatively healthy 13 percent reserve for the coming fiscal year. But it would decrease the following year’s already unhealthy reserve of 9 percent down to about 7.5 percent.
Despite Merchant’s warnings and a fiscal situation that has left the city operating with a barebones staff with 145 vacant positions remaining unfilled, reduced services and City Hall closed on Fridays, Councilwoman Mary Rocha was concerned about increasing spending for arts and cultural activities.
The city’s Arts & Cultural Foundation budget has been reduced to $18,000 in the coming year. It traditionally receives 30 percent of the revenue from the hotel occupancy tax, which has been decimated in recent years with the demolition of the Best Western hotel and drop-off in tourism and travel to the city. At one time that tax was bringing in more than $300,000 annually.
The reduced budget has resulted in fewer art shows at the Lynn House Gallery but the city’s summer concert series, which is sponsored by the Lesher Foundation, will go on as scheduled, with the first concert headlined by Vocal-Ease this Saturday at 6 p.m. in Waldie Plaza in downtown Antioch.
‘We are losing who we are,” said Rocha about the reduced arts and cultural activities in the city. “Little by little we are cutting away what Antioch is. If we can keep it going. I know music might not be a lot for people. To have a free concert and enjoy ourselves is an important thing. I’m asking for support on increasing that.”
The other council members were noncommittal but agreed to discuss it at the July 19th study session. Councilman Wade Harper acknowledged the value of the arts, saying, “How important is civic pride and establishing our brand and attracting other people to our city.”
But Councilman Brian Kalinowski, the budget hawk on the council, argued that sacrifices need to be made in tight budgetary times.
“180 days ago we were looking bankruptcy right in the face,” he said. “Although the pressure valve has been released some, it’s no joke. (It) doesn’t seem like a lot of money. But it’s these kinds of exceptions that get made and occur in Sacramento on a grander scale is why the wheels have fallen off.
“How do you take away from the General Fund when we have already done all of the cuts that we have done? How do we fund that group when we have not historically done that for other groups? This is not the place and time to be taking from the General Fund for nonprofit organizations that are not the responsibility for the city proper.”
City Manager Jim Jakel, earlier in the budget discussion, reminded the council of the city’s skeletal staffing situation while acknowledging that things appear to have bottomed out. “I have been able to breathe again for the first time in 18 months,” he said. “We have work to do. I’m unhappy to be where we are right now. We are so far from where we would need to be and the community would like us to be.”
In other business, the council:
• Applauded Jakel’s announcement that he has hired interim Police Chief Allan Cantando to be the city’s new police chief, replacing Jim Hyde, who retired earlier in the year.
• Was informed by Walter Ruehlig, who is leading the planning for the 4th of July celebration, that so far there are about 40 entries in the parade, which will start at 10 a.m. at Second and E streets.
• Watched a demonstration of the police department’s new online crime reporting system that is expected to recoup its $12,000 cost in three to four months and provide timelier and more accurate data.
• Approved the annual landscape and lighting assessments. It includes $713,000 from the city’s operating budget, which has been decreased from the $1.3 million the city was contributing several years ago due to lower maintenance landscaping.
• Approved a request by Meritage Homes to reduce the size of some of the homes that will be built at Hillcrest Avenue and Hidden Glen Drive.