Denise Rockenstein — Staff reporter
CLEARLAKE — The Clearlake City Council adopted a $20.3 million preliminary budget on Aug. 16 for the city of Clearlake. City Manager Joan Phillipe said revenues are slightly higher than the last fiscal year while expenditures are reduced.
Phillipe said the document represents a balanced budget.
“In the coming year, work will continue in exploring new sources of revenues; reviewing franchise, permit and service fees; and of course, the dissolving the redevelopment agency (RDA),” Phillipe said. “As identified throughout the budget, work will focus on the city”s overall goals as well as departmental goals.”
Phillipe said those goals focus on code enforcement, public safety, economic development and fiscal health.
Phillipe said demands for services and needed infrastructure would continue but limited resources would strain the city”s ability to address those needs. She said the groundwork is being laid to meet those demands as a result of action by the council to proceed with a sales tax measure on the November ballot combined with adopting financial management policies as part of this year”s budget.
According to Phillipe, a fiscally conservative approach was used in developing the preliminary budget. She said revenues are projected on actual funding streams without growth projections.
“Indicators are that the overall economic forecast is improving; however, even with the promise of some commercial development on the horizon, we cannot project revenue until applications are actually filed,” she added.
Phillipe said the preliminary budget was late in being adopted because identifying exactly where the city”s finances stood was a monumental and time-consuming task for Interim Finance Director Sandra Sato. She said the state”s mandate to dissolve the RDA also contributed to the delay.
“The action placed a tremendous time burden on our small staff to not only understand and implement the mandate but to perform the necessary tasks within the required timeframes to avoid penalties,” she said.
Phillipe said reserves are needed to fund unexpected expenditures and to provide cash flow during periods when revenues lag behind expenditures. She said without an adequate reserve the city has to do inter-fund burrowing to temporarily meet cash flow needs.
According to Phillipe, the General Fund 100 has a positive ending balance of $332,295 at the fiscal year 2013. However, she said when the deficit in Development Fund 101 is projected at $322,435 for the same period net “spendable” assets total of $9,860. “Clearly there is critical need to establish a revenue reserve account as soon as possible,” she said.
Phillipe recommended creating a reserve of at least 5 percent, which based on the proposed budget, would be about $205,000. She said the actual amount should be $250,000 and the city should intend to increase that amount in next several years. “Clearly our work is cut out for us,” she said.
The preliminary budget is available for public review at Clearlake City Hall, 14050 Olympic Drive.
