Finance Director Dawn Merchant said the city should end the current fiscal year (which wraps up on June 30) with a surplus of roughly $152,000. Revenue in the current fiscal year increased by about $300,000, largely due to increased sales tax revenue. Sales tax is up 8.4 percent from March of 2011 to March of 2012; California’s sales tax revenue increased by 8.8 percent in that time period.
Merchant believes the city could earn more money through unused overtime hours. “We’ve really begun to build back up and are more stable,” Merchant said. “It’s very promising.”
However, as the city starts planning for the future, it might be forced to find other ways to boost revenue. According to Merchant’s staff report from Tuesday’s City Council meeting, Antioch will be spending about $2.4 million more than it takes in next fiscal year, which starts July 1, 2012. The positive budget of the current fiscal year was aided by labor concessions and one-time donations from GenOn Energy.
For the upcoming budget, Merchant projected no cuts to staffing, a 2-percent decrease in property tax and contractually obligated raises for Antioch police officers. She also noted that other costs out of the city’s control, such as utilities, are projected to rise.
If there are no changes, the $2.4 million in deficit spending will grow to about $4.8 million in the fiscal year beginning July 1, 2013, depleting the city’s reserves and leaving it about $300,000 in the red.
“We have reached a level of stability in the last 24 months, but don’t take it as a false sense that we’re out of the woods,” City Manager Jim Jakel said during Tuesday’s City Council meeting. “Together, we’ll be able to do it, but it’s a daunting task.”
The crux of Antioch’s problem is lack of revenue. The city of about 102,000 received roughly $34 million in the current fiscal year, largely from property and sales taxes. Jakel said this kind of revenue stream is about the same as Brentwood’s, a city half Antioch’s size.
City officials have repeatedly insisted that there’s nowhere else to cut costs. Antioch is authorized to staff 401.75 full- and part-time positions. Right now, the city is dealing with 157 vacancies.
Antioch’s police department – which represents the biggest personnel cost – has 61 vacant positions, including all 20 community-service officers and 27 patrol officers. Police funding from outside of Antioch’s general fund has dropped from $3 million in fiscal year 2009-10 to a proposed $2.1 million in 2012-13.
While City Councilman Gary Agopian applauded city staff’s efforts to keep costs low, he called for some kind of action to brainstorm revenue sources. He asked his peers on the dais to create a blue-ribbon committee to tackle ways Antioch can gain more cash.
“What we have to do strategically is develop the type of city that will foster economic development, improve our tax values, improve our home values and improve city services,” Agopian said. “But that isn’t going to happen overnight.”
Jakel said the city could likely be better funded if sales tax projections continue to climb. It might also receive some money from GenOn Energy, whose plant east of Antioch could soon become part of the city if annexation goes through.
Jakel said the city also plans to work closely with its biggest moneymaker – auto sales – to ensure that the Antioch Auto Center and the city’s numerous used car lots plus automotive-related businesses have the resources they need.
Merchant said sales tax revenue could recover to pre-recession levels by 2016, but the property taxes aren’t as easy to predict.
Antioch plans to hold two more budget study sessions before adopting a ledger in June.