2010-11 budget retains vital services

DOWNEY - After months of attempting to mitigate a more than $3 million deficit, the City Council on Tuesday adopted the 2010-11 fiscal year budget, which maintains vital city services while drawing on reserves to cover budget shortfalls.The newly approved budget, which passed unanimously, totals more than $147.5 million and allocates nearly $68 million to the city's general fund, which covers specific city services including the police and fire departments, community services programs and public works projects. Prior to the vote, Director of Finance John Michicoff described the city's current economic outlook while indicating how the 2010-11 budget funds will be spent. Similar to past years, the police department will receive a significant portion of the operating funds, over $31 million, as the city seeks to emphasize public safety and crime reduction. In addition, the city will also allocate $17 million towards the fire department, nearly $20 million towards public works and $13.7 million for community services programs. According to Michicoff, the city will receive 72 percent of its income from taxes and fees, but will experience another decrease in tax income this fiscal year as various tax revenues including water utility revenues and sales taxes from auto dealerships will continue to decline. Michicoff also said fiscal uncertainty within the state would continue to play a role in Downey's economic recovery, as California will withhold nearly $2 million in gas tax revenues from the city and defer payment until April 2011. With city revenue decreasing, the city is forecasting a more than $3 million deficit, a number that was reached after each department worked with the Council budget subcommittee, headed by Council members David Gafin and Mario Guerra, to cutback programs. In addition, the city will maintain its hiring freeze, leaving over 25 management level positions vacant in order to reduce expenditures. Currently, one out of every 10 management positions is vacant, Michicoff said. For the last three years, the city has also deferred most new equipment requests hoping to save money by waiting to replace aging equipment. However, despite the cutbacks, the city will allocate $46.6 million in stimulus funds for capital improvement projects such as street and sewer repairs. Michicoff said the city has gradually collected these funds over time in order to direct the money towards major improvement projects this year. Overall, though there will be a minor reduction in programs, the city is expected to maintain service levels, as money from the city's reserves will cover the deficit and prevent furloughs or layoffs. On Tuesday, Council members praised city staff for making the necessary cuts and drafting a reasonable, conservative budget. "It was not an easy task," said Mayor Pro Tem Luis Marquez. "I commend our staff for doing a lot more with less - we're not here to cut programs or close parks. We should also thank previous Councils for putting money away when the economy was doing well." Prior to the vote, Gafin reflected on the budget, which he believes achieves their goal of maintaining city services amid harsh economic conditions. "This is a much different budget than what we started with," said Gafin. "We started $11 million over budget to begin with, but we brought it down. We could have made it a balanced budget by closing the library and parks, but with this budget citizens won't notice much difference in the services offered."

********** Published: June 24, 2010 - Volume 9 - Issue 10