SAN FRANCISCO – Critical funding measures on the ballot in the struggling California cities of Fresno and Hercules hung in the balance Tuesday before voters – one appears to have passed, another’s fate is too close to call.
In Fresno, city officials were awaiting further vote tallies Wednesday as its measure to outsource its residential trash service to help balance its budget barely led with 50.26% of the vote. Absentee and provisional ballots still needed to be counted as of Wednesday morning, according to the county elections office.
The outsourcing deal would generate about $1.5 million this year and $2.5 million per year thereafter in franchise revenue, while reducing user rates.
If authorized by voters, it would help prevent further cuts to public safety services and more employee layoffs, according to the city’s mayor.
“Assuming all elements of the proposed budget are implemented, fiscal year 2014 will be a turning point toward fiscal sustainability for the city of Fresno,” Mayor Ashley Swearengin said in a statement last week.
Fresno, with a population of more than a half million in the heart of the state’s Central Valley, is grappling with near-term budget problems after it watched its economy fall off a cliff during the recession.
Fresno faced a $16 million deficit in its fiscal 2013 budget due in part to further drops in property tax revenue, unrealized labor concessions, and delay in implementing the commercial garbage contract.
The city has tackled more than $100 million of budget deficits over three and a half years, cutting its workforce by 25% citywide, officials have said.
Hercules officials are probably a bit more relaxed today.
More than 70% of city voters approved a measure that would increase the city’s utility tax two percentage points to 8% for five years, and expand it to include cable television, according to preliminary results from the county elections office.
The apparently successful tax increase would raise about $1 million annually to help the city close a $1.27 million structural deficit in its general fund.
“The bottom-line is that without additional funding, we will have no choice but to consider dissolving our Hercules Police Department, and contracting out public safety services to the county,” City Manager Steve Duran said in a memo to City Council members last week.
This is the second tax increase in as many years Hercules voters have approved to try to fix the city’s financial problems.
The city got a boost in June 2012 when voters overwhelmingly approved a half-cent sales tax increase for four years to add as much as $500,000 revenue annually to the city’s budget.
Last month, the City Council approved the sale of its municipal utility to Pacific Gas & Electric for $9.5 million, which will help retire bond debt.
Hercules, located northeast of San Francisco with a population of around 26,000, has been battered by self-inflicted financial problems, including allegations of misuse of bond money, poor record keeping and other problems.
The allegations of fiscal improprieties led the Federal Bureau of Investigation to open a probe.
The city now has mostly new officials who replaced those who oversaw the alleged abuses, and the new team says it recognizes many of the problems and is trying to correct them.
