Total general fund expenditures are projected to be $2.46 million more than revenues during the 2013 fiscal year, according to the $36.7 million budget adopted by the council Tuesday. Deficit spending is projected to jump to $4.9 million by 2014.
“The hard work begins with that number,” said City Manager Jim Jakel of the projected deficit in 2014. “But I’m confident that with hard work, that number can be lowered.”
The city has seen a $13 million decrease in revenues from 2007, when the budget was about $47 million. Projected revenues for 2013 are expected to be around $34 million for the third year in a row.
The outlook means the city could continue to struggle to provide health, safety, welfare and recreation needs for the community without increased revenue, according to documents provided to the council by Jakel and Finance Director Dawn Merchant.
As a result of future projections, it’s likely the city must take proactive measures such as furloughs, layoffs, generalized spending cuts, and pursue grant funding to make ends meet for the next several years. Positions within city departments are slated to be changed or redesigned for budgetary purposes, especially within public works.
The city is already accustomed to working with limited resources and funds: 159 city staff positions – 40 percent of the former workforce – are currently vacant. “We have to realize this is going to be the size of our organization for the next couple of years,” said City Councilman Gary Agopian.
The council agreed that sugarcoating the economic reality of the city will do nothing for the citizens of Antioch. “This is our new norm,” said Antioch Mayor Jim Davis.
Mayor Pro Tem Wade Harper believes the council must move forward and make decisions based on sound economic principles. “Let’s not spend money we don’t have,” Harper said. “We have a responsibility to be fiscally responsible.”
The council will look into making changes to council members’ medical benefits at its next meeting in July. The council moved forward Tuesday on a plan to decrease councilmembers’ pay by 10 percent and their vehicle allowance by $100.
According to Jakel, part of the city’s budgetary problems stem from declining property values. Property tax revenues decrease parallel to property value, which leads to decreased city services. Rising property values, and increased property tax revenue needed to meet demands for full city services, are still many years away. Property tax revenues is projected to decline 2 percent during the next fiscal year.
“It’s just like a personal budget,” Agopian said. “You can’t spend more than you take in. It is clear we have to reduce the structural deficit, and we have to do it in the next 12 months.”
There are, however, rays of hope amid the somber budgetary projections. Revenue from sales tax is projected to jump 4.8 percent during the next fiscal year, and several transit-related projects are slated to inject life into the city’s economy.
Between now and 2015, half a billion dollars will be spent on Highway 4 and eBART, which will ferry money into the city. eBART will allow East County residents to board a train at Hillcrest Avenue and arrive at the Pittsburg/Bay Point BART station in 10 minutes. Plans are also moving along to bring a ferry service to downtown that will transport people to San Francisco.
Antioch stands to gain about $1 million from GenOn Marsh Landing if the city can annex land near Viera Avenue before the end of the year. GenOn Marsh Landing is building an energy generation station near Wilbur Avenue, and wants to bring it within city limits.
The city was also awarded about $1.2 million to hire five more police officers through the U.S. Justice Department’s Community Oriented Policing Grant, and budget projections call for the creation of a code enforcement position by 2014 to replace the current contract arrangement.
“It (the 2013 budget) isn’t structurally sound, but it will get us to the next pay day,” City Councilman Brian Kalinowski said.