A fiscally conservative approach has led to the City of Patterson having a balanced budget for several years, but that streak has come to an end when city staff proposed the 2020-2021 fiscal year budget to the City Council on July 28 for consideration that contained a slight deficit.
A final vote was taken on Aug. 4 finalizing the proposal. The council passed the budget for the upcoming fiscal year unanimously on Tuesday.
The proposal tallied a total budget of $75,444,367. This includes $22 million for general fund operations, $23.3 million for enterprise funds and $30 million for other funds and capital improvement projects.
A total of approximately $21.8 million in general fund revenue was estimated for the upcoming fiscal year, resulting in a $176,839 general fund deficit for the City of Patterson.
General fund revenue was broken down into seven categories:
- Investments/Other-$196,139 or 1%
- Fines and Forfeitures- $185,000 or 1%
- Recreation- $211,620 or 1%
- Services- $147,653 or 1%
- Inter-government- $5,867,274 or 27%
- Transfers- $3,831,813 or 17%
- Taxes- $10,399,750 or 47%
- Licenses and Permits- $1,041,621 or 5%
- Total- $21,880,870
The general fund expenditures was broken down into eight categories of spending:
- Transfers- $2,085,291 or 9%
- Public works- $2,522,824 or 11%
- Streets- $682,024 or 3%
- Recreation- $2,392,419 or 11%
- Police- $5,848,272 or 27%
- Fire- $3,016,172 or 14%
- Building and Engineering $715,869 or 3%
- Planning $810,600 or 4%
- Administrative services- $3,984,238 or 18%
- Total- $22,057,709
The City’s adopted budget maintains 22.53% of general fund reserves for a total reserve level of $4.9 million. The amended 2019-2020 fiscal year budget was at 26.19%. The city is still well above the recommended 5% minimum reserve level.
Should the estimated budget hold true for the upcoming fiscal year, the general fund deficit would be covered by the reserve fund. The city’s ability to save for a rainy day has come to fruition for staff and officials resulting in the city’s ability to absorb a potential reduction in revenue due to the COVID-19 pandemic.
City staff created the budget proposal with the goal of not using the general fund reserves as much as possible by trimming $1.3 million in departmental budget reductions in non-essential areas such as consulting services, software upgrades, non-critical maintenance, staffing hours and headcount. City staff also proposed a hiring freeze and no new hiring positions were included with the exception of a School Cross Walk Program. City staff workforce will see a decrease in part time staffing due to programs interrupted by the pandemic. The current workforce consists of 121 full time and 106 part-time positions.
Many essential projects had to be postponed for another assessment during the mid-year review.
The pandemic has disrupted revenue streams for the City of Patterson. With a decline in commercial and residential developments, there is also a decrease in revenue from building permits and sales tax. Stanislaus County reported a 17.5% unemployment rate, while San Joaquin County reported 16.6%.
“Although revenues have fallen some due to the pandemic, we continue to see a leveling in the economy in Patterson, and staff remains diligent in the area of budgeting,” read the budget proposal. “With this conservative approach to budgeting, along with clear direction from the mayor and council, although temporarily postponed, we will continue to see significant community enhancement in the future. We continue to concentrate efforts in the area of economic growth and downtown revitalization.”
While the city expects the pandemic to adversely affect revenue streams in the upcoming fiscal year, the situation regarding its impact is fluid. Much of the estimates could change both positively or negatively depending on the severity and duration of the pandemic shutdown.
City Manager Ken Irwin shared that city staff will continue to monitor how the shutdown will or will not impact budgetary concerns as the city moves forward and make adjustments if necessary to projects or staffing considerations.
At this point in time there is still reason for optimism regarding the budget despite the fiscal hardship endured since the pandemic shutdown began in March.
“The city is still fortunate to have a more diverse revenue structure which can continue to benefit from Measure L; the ½ cents transaction and use tax over 25 years, SB1 revenue, new businesses such as the Hampton Hotel, Valero Gast Station, Hamen Truck Wash, Starbucks, Patterson Family Pharmacy, Rancho Fresco, and Cannabis retail and manufacturing,” reads the report.
Despite the circumstances, Patterson is slated to welcome several new businesses including S2A Modular, Patterson Travel Center, La Quinta Hotel and Javi’s restaurant in downtown offering even more potential business to Patterson.