City Coffers Get Unexpected Boost

Lemon Grove will end the fiscal year with almost $1 million more than expected, giving the city a year-end balance of $2.25 million in its general fund and reserve, according to a draft budget.

The $945,000 is due to lower personnel costs and the city opting not to re-loan the redevelopment agency $357,000 at year-end, said finance director Cathy Till.

The staff report cites an overall increase in revenues and decrease in expenditures, combined with higher than anticipated starting balances, resulting in growth in the city’s general reserves from about $1.3 million to $2.2 million (see PDF in the media box for full details).

How to best use the excess was discussed at the Jan. 17 City Council meeting at the Community Center.

One of two major recommendations is to allocate $300,000 to pay down the CalPERS Side Fund, saving the city an estimated $850,000 in interest costs over the life of the fund.

The other is to transfer $80,000 to the Self-Insured Fund, increasing its balance to $1 million—the lowest threshold recommended by the city’s insurance consultant.

If the City Council opts to take up those expenditures, a balance of $1.8 million would be left in the general reserve fund—which is about $500,000 more than anticipated, said City Manager Graham Mitchell.

Other recommendations are spending $100,000 to replace the city’s outdated accounting software, which was designed by a firm that specializes in Canadian school district clients and is used by only two cities in the state; and purchasing a new dump truck at a cost of $50,000.

The staff report indicates the 15-year-old public works vehicle is worn and inefficient. It has a slipping transmission, a partially operating bed, lacks power for freeway driving, and can’t carry a full 4-ton load—making multiple trips necessary to complete a job.

A one-time stipend for city employees—perhaps $250—was broached and received mixed reaction from council members.

Mayor Mary Sessom was adamant that the new budget include some type of benefit for workers to recognize their sacrifices throughout the years of the down economy—there have been staff cuts, no raises and increased furlough days since 2009, she pointed out.

“Staff needs to know that they are coming out from underneath this black cloud above us,” Sessom said. “The city runs on people, not dump trucks.”

Councilwoman Mary England, who recently announced , offered a different point of view.

“But the people we serve depend on the dump truck,” England said.

Discussion concluded with the council requesting that the mid-year budget include a proposal to compensate workers with a small bonus.

The next City Council meeting is at 6 p.m. Feb.7 at the , 3146 School Lane. They will consider the budget at the session.