The City Council voted 4-1 Tuesday night to approve a $63.2 million interim two-year operating budget after further discussing the matter during a closed session.
A proposed budget will be brought back to the City Council after the city and employee groups conclude labor negotiations and reach agreements.
“Basically, we need to get a work plan in place, a legally adopted budget, understanding our work isn’t done,” City Manager Keith Till said. “This serves as an interim budget work plan until we get another final look at it.”
According to Till and Director of Finance Tim McDermott's report, the city will have used more than $2.6 million in reserves to balance the general fund budget during the three-year period ending June 30. The two-year draft budget reflects the continued use of reserves—$897,900 in fiscal year 2011-12 and $466,440 in fiscal year 2012-13—in order to balance the general fund budget.
General fund revenues are projected to total $30.6 million in fiscal year 2011-12, which is a 0.3 percent increase from the previous fiscal year. General fund revenues are projected to total $31.2 million in fiscal year 2012-13. According to the budget, general fund expenditures are expected to be $31.5 million in fiscal year 2011-12 and $31.7 million in fiscal year 2012-13.
“Essentially, we do everything that was proposed in the draft budget,” said Till, when he explained what an interim budget is. “Virtually everything else that isn’t subject to the labor negotiations is included in the resolution.”
Key points of the budget include city employee furloughs being lifted as of July 1. General and management employees have had a 3.75 percent salary deduction through mandatory furloughs.
Furthermore, general and management employee groups will be responsible for the expected 12 percent increase in health insurance premiums for fiscal year 2011-12. According to the budget, this is a tentative measure for the . The final health insurance cost share will be implemented after contracts are negotiated.
The council did not vote on the interim budget until after it held a closed session to give direction to staff regarding labor negotiations with the Santee Firefighters Association and full-time miscellaneous and management city staff.
“I think any of these decisions need to be made comprehensively,” said Councilman Jack Dale, who voted against the interim budget.
The City Council was given a report regarding key factors impacting the 2011-12 and 2012-13 operating budget on March 23. On May 11 and May 25, staff presented the draft budget to the City Council for review and discussion.
Till said he expects the proposed budget to be brought before the council in August.
“The reason for it is that primarily, we haven’t had a chance to complete labor negotiations for a new contract for represented employees, and secondly, we haven’t completed the comprehensive fee study that might be another tool at your disposal,” Till said. “You have the ability to review this again before the final recommended budget is adopted. At that time, we’ll know the results of the labor contract negotiations and hopefully the fee study.”