Hercules City Council to Discuss Mid-Year Budget Review and 2013-14 Strategic Plan

The City of Hercules is facing a projected structural deficit in the City’s general fund for FY2013-14 of $1.2 million.

It may not be a major development, but city officials will need to find a solution to the matter if it wants to reduce a deficit that may infringe upone available funds projected for 2014.

About $1.2 million of one-time money was used to balance the FY2012-13 budget, and while additional sales tax revenues of about $250,000 is projected for FY2013-2014 and some costs can be reduced, projected increases in retirement and health care benefit costs will offset those impacts, according to a recent City Manager's report.

"Since there is only about $600,000 of unbudgeted general fund cash remaining and any unexpected expenses will further reduce that sum, one-time monies will not be available to balance next year’s budget and avoid severe cost cutting measures," the report notes. "With retail development and residential development in the queue, it will still be two to three years before a new Safeway and other stores and restaurants can provide additional sales tax and all new development can provide additional UUT."

The city has grappled with its budget, recently calling for a special election in June to ask voters to increase the utility users tax from 6 percent to 8 percent, and to include cable in the utilities taxed.

Staff are expected to present the mid-year status of the fiscal year 2012-2013 budget to the City Council at the March 12 City Council Meeting. The Council will also discuss strategic goals and priorities for the City.

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