Council trims sales-tax growth assumption; sends budget back for revised forecasts and 10-year plan

Reddings City Manager and finance staff presented a draft general fund and internal service funds budget that included proposed expense reductions and a revenue forecast council members debated at length. Council directed staff to rerun the budget using a lower sales-tax growth assumption and to return with the fiscal implications and an updated 10-year plan.

City Manager Barry Tippen and Finance Director Greg Robinette led a multi-hour presentation that reviewed the citys cash history, lingering effects from previous yearsone-time federal dollars and a multi-year structural deficit the city has been addressing since 2023. "When we adopted the current budget, we adopted it with a structural deficit," Tippen said, summarizing the revenue declines and expense pressures that had prompted multiple rounds of cuts and adjustments.

Robinette walked council through departmental reductions, internal-service charges and proposed cuts that together produced a balanced draft budget with a modest surplus for the first year and narrower margins in year two. Staff emphasized the citys reliance on sales and property tax and cautioned that sales tax collections had softened since 2022. Robinette said the draft assumes a flat or modest sales-tax rebound and warned council that a material shortfall in actual sales-tax collections would quickly require further adjustments.

Public commenters raised concerns about parks maintenance and the impact of water reductions at South City Park. Leslie Sawyer urged the council to examine missing details in prior budgets and asked staff to return clear cash-flow and actual-versus-budget reports. Jim Giacomelli, speaking for Sons and Daughters of Italy, said turning off irrigation at some parks could prevent events and cause tree loss.

Discussion among council members focused on the level of conservatism in revenue projections and what additional expense reductions might be necessary. Councilmembers debated whether to further reduce the sales-tax growth assumption from the draft 2.5% to a lower figure. After motions and a roll-call, council voted to lower the assumed sales-tax growth rate by 0.5 percentage point (from 2.5% to 2.0%) for budgeting purposes and directed staff to return on May 20 with the effect on the draft budget, additional reduction options and a completed 10-year plan. The motion passed on the record 4-1.

Council also asked staff to provide the standard quarterly actuals report comparing revenues and expenditures to budget for FY2024 so members could review recent performance and verify assumptions.

• Direction: Staff to rerun revenue forecasts and budget scenarios using a 2.0% sales-tax growth assumption, prepare an updated 10-year plan and return May 20 with ramifications and additional reduction options.

• Vote summary on revenue assumption re-run: motion passed 4-1 (no roll-call names specified in transcript excerpt).