NORWALK — The city's financial picture is looking brighter after months of fiscal belt-tightening and the receipt of some additional funding, according to a midyear budget presented this week.
Under the 1988-89 budget approved by the City Council last summer, the city expected to draw on reserves to spend $3.29 million more from its general fund than it would receive in income. The revised 1988-89 budget considered by the City Council on Tuesday night shows the general fund finishing the year about $31,000 in the black, leaving a reserve of $11.7 million.
The budget also provides funding for a proposed gang-prevention program and neighborhood rehabilitation program. These and other proposed new programs would be funded mostly through federal grants and money earmarked for road improvements. The council decided to further review the midyear budget and the proposed programs before approving them.
"We will be spending, with the proposed budget, within (the city's) means," said Sanford M. Groves, assistant city manager. "The city needs reserves for new programs that may not have been anticipated, and for calamities, such as an earthquake."
Continue Hiring Freeze
The budget proposes continuing a hiring freeze on about 25 vacant positions--a little more than 10% of the city's authorized work force. Groves said the city would try to determine whether the hiring freeze is adversely affecting services, but so far, there is no indication that it is.
Mayor Marcial (Rod) Rodriguez said he supports a continued freeze.
"I haven't heard of any (decline in services), but we're going to be keeping close tabs," he said.
When City Manager Richard R. Powers was hired by the council last summer, he was given the task of reducing the projected $3.29-million general fund deficit. The general fund pays for most city services, including employees' salaries and police and fire protection.
The hiring freeze and reductions in spending for maintenance and for new equipment, such as filing cabinets, account for about $606,000 in reduced spending, according to the new budget.
The budget also proposes that the city use Redevelopment Agency funds and federal grants to pay for about $400,000 in programs that otherwise would have been paid for by the general fund.
City officials learned that they will be able to save $800,000 that had been earmarked for building sound walls along Interstate 5. California Department of Transportation officials said they will pay for the walls, which are to be completed by June 30, Groves said.
Another $230,000 in savings comes from delaying capital projects, including roadwork and the construction of city warehouses.
The rest of the projected deficit was erased by increased projections of revenues and income that inadvertently had not been tallied in the previous Administration's budget, Groves said.
The biggest increase comes in the area of sales tax revenues. The 1988-89 budget projected $6 million in sales tax revenues this year. Powers has revised that figure in the midyear budget to $6.7 million, based on sales tax figures for the first five months of this fiscal year, Groves said. The city received $6.78 million in sales tax revenue during the 1987-88 year, the midyear budget said. The current fiscal year runs from July 1, 1988, to June 30.
"I think they were just being overly conservative," Groves said. "The economy has been growing and retail sales have been strong." Groves noted the new estimate is conservative, but said it is better to slightly underestimate revenues than deal with a shortfall later.
Pending final approval, Rodriguez said it appeared that the city was on the right financial track and the council could begin to redirect its attentions. Powers said he hoped the council would approve the midyear budget next month.
"We don't have to look to replace that (the deficit) anymore," Rodriguez said. "We can look ahead with any new revenues that come in."