Elk Grove Gets 'Good News' Proposed Budget For Fiscal Year 2013

Increased sales taxes, pension reforms enable proposed balanced budget

At last night's regular meeting, the Elk Grove City Council received what City Manager Laura Gill called a "good news" budget for fiscal year 2013.

In her presentation to the council Gill said that through a combination of an improving economy and pension reforms, the city will have a balanced budget for the next fiscal year without having to use any of the city's cash reserves.

"I would characterize this a good news budget," Gill said.

The proposed budget is $157 million which is eight percent high than the current year's $149 million. The general fund budget, which provides discretionary funds for services is $51.8 million which is 2.7 percent higher than the current year's budget of $50.4 million.

Gill note that improving economy has helped fuel an increase in sales activity, particularly for autos. Gill said that the year over year change for the last quarter reflected a 27 percent increase.

"Sales taxes revenue is growing at robust rate," Gill said. "But we don't know how long it will last." Gill added that the city's sales tax consultant said there could be an eight percent drop in 2014.

Aside from an increase in sales taxes, Gill noted that because lower property assessments property tax revenues have fallen. Because of the city's tax neutrality agreement with the county which is funded by property taxes, the county if more affected by this than the city.

Gill said that the city's ability to balance the budget also is attributed to pension reforms that will be effective July 1. Employees will now pay the entire 9 percent towards their pension contributions.

In return for this concession, sworn employee will receive a six percent pay increase and non-sworn employees will receive five percent.

"That is how we are able to have a balanced budget," Gill said.

When asked by council member Sophia Scherman on the status of the city reserve funding, Gill said that it is estimated at $14.25 million or 29 percent of general fund appropriations.

Gill did sound a note of caution adding that the expenses could "creep up" and exceed revenues for the fiscal year 2014.

The proposed budget needs to be approved before the start of the new fiscal year which starts on July 1 .