SELMA – Despite objections from Mayor Scott Robertson and Councilmember Sarah Guerra, the city’s operating budget for the upcoming fiscal year is officially squared away after the Selma City Council voted to approve the budget well ahead of the deadline, which is at the end of the month.
At the Selma City Council meeting on June 3, City Manager Fernando Santillan submitted the final budget proposal to the council for adoption and said there were few changes made to the budget since the council reviewed a draft at its May 20 meeting. The council voted 3-2 to adopt the budget, with Robertson and Guerra voting against adoption.
“I think that the city council is wasting the resources of our city, and I think this budget is reflecting that,” Robertson said. “I think our city council is mismanaging our financial resources, and we are getting into trouble. Our city is moving in the wrong direction and going into trouble – that’s my opinion.”
Robertson stayed true to his word from the council meeting on May 20 when he said he would not vote for the budget if the city could not guarantee the installation of trees, cafe lights and speakers in the downtown. Per requests from the council, city staff added new and carry-over funding for those items between an initial budget workshop held in April and the draft presentation in May.
“I know our citizens want a guarantee and they want those trees back and they want those lights back, and we’ve wanted the speakers for years,” Robertson said.
Santillan said the installation of those items was not a guarantee he could make, as there could be circ*mstances preventing the installation that are beyond his control. Further, he has said city staff would prefer to wait until the city finalizes its downtown strategic plan — which should be ready this summer — before it installs anything downtown in order to ensure there is a cohesive look to the area.
“We can’t predict what’s going to happen,” Councilmember Blanca Mendoza-Navarro said.
Fiscal year 2024-25 begins on July 1, with the city planning for a general fund budget of $19.1 million in expenses and $19.3 million in revenues. Revenues are lower than they were in the previous few years, which is something cities across the Central Valley are experiencing as they predict decreased sales tax revenue. Selma’s budget stands out from some neighboring cities in that its expenses are also down from last year, however; many cities are seeing increased expenses attributed to inflation.
In the details
A settlement agreement made between Santillan and the city following an investigation of a complaint against the city manager — which included a $350,000 payment to Santillan, who was cleared of any misconduct by the third party investigator — did not impact the proposed budget, Santillan said. The payment will be reflected in the city’s expenses for the current fiscal year and will come out of the general fund reserves, which is typically used for unanticipated expenses like insurance and liability payments.
The only thing that changed from the draft budget to the final budget was the cultural arts enterprise fund that is housed under the community services department and has been operating with a deficit. As an enterprise fund that reflects the costs of operating the Selma Arts Center, it is supposed to pay for itself, Santillan said.
“Since COVID, it was understandable that the revenue would decline and that we would have to dig it out of its hole over time,” Santillan said. “So now it’s that time to start paying back what the general fund subsidized those two years of COVID.”
Santillan said he asked the community services department staff to look for ways to increase the potential revenue and decrease the cost of that fund. Between the May 20 draft and the June 3 draft, the proposed revenues for the fund increased from $190,600 to $229,600, attributed to proposed program revenue. Expenses decreased by $3,000, from $224,902 to $221,902, attributed to program expenses.
Looking at specific line items, Robertson questioned why some of the numbers in the non-departmental general fund section differed from the previous budget draft.
In the budget presented on June 3, the city listed its actual revenues generated in fiscal year 2022-23 as $2,451,582 from vehicle license fees and $9,344,694 from sales and use tax. Robertson pointed out that this was different from the draft presented on May 20, which listed the budgeted revenues for fiscal year 2022-23 as $2,308,009 from vehicle license fees and $9,584,045 from sales and use tax.
This was because the numbers listed in the June 3 budget draft reflected the actual revenue the city received in fiscal year 2022-23, whereas the numbers listed in the previous draft reflected the revenue estimates the city adopted for that year.
Revenues, specifically from sales taxes, are difficult for cities to estimate with complete accuracy because of the variability in consumer behavior. The differences between the actual and projected revenues brought up by Robertson amounted to $143,573 and $239,351, respectively. Santillan clarified that these numbers had no impact on the fiscal year 2024-25 proposed budget being discussed.
“There’s quite a bit of a variance between what we’re seeing in terms of budgeted numbers and actual numbers, and what I would like to see in the future would be numbers that are closer that are budgeted that are accurate, … just from a financial tool,” Robertson said. “The more variance you see, the less reliability that you have on those numbers themselves.”
