Budget Is Balanced for 1997-98 Fiscal Year

The city’s $12.5-million budget is balanced, though “somewhat precariously,” City Manager Keith Till said this week of the spending plan for fiscal 1997-98.

“The revenue stream is adequate, provided we keep tight reins on expenditures, and there are no unforeseen major emergencies,” Till said.

The single largest concern is the 11% utility tax, which represents nearly a third of general fund revenue. Southern California Edison Co. will reduce electricity rates for next fiscal year by 10% in response to deregulation of electric utilities.

As a result, Till expects a significant decrease in tax revenue.

“Fortunately, we anticipate offsetting the estimated utility tax loss through a combination of slight improvements in property tax, sales tax and several other sources,” he said.

The city’s unpopular utility tax was passed in 1993 to help close a $1.7-million budget shortfall, which led to a 22% reduction in city staff. Council members at the time had vowed to review the levy each year.

Overall, revenue this year is expected to increase by about 1.3%, while expenditures are estimated at approximately 4.5% above last year, he said.