The city of Lodi’s Finance Division told the Lodi City Council on Wednesday night that there is $1 million more in revenue than was anticipated in June, when the city’s budget was adopted.
Deputy City Manager Jordan Ayers presented an annual financial report by independent auditor Macias, Gini and O’Connell, LLP, to the Lodi City Council at its Wednesday meeting.
The report noted that the increased revenue was due to higher-than-expected numbers in sales and property taxes, two of the city’s biggest revenue sources. How the extra revenue will be spent remains to be seen.
Revenues were expected to hit $42,198,820 in June, as were expenditures. Revenues have been higher than anticipated, however, reaching $43,188,820.
Ayers said Wednesday that sales tax was up by $470,000 and property tax up by $104,000. In addition, the city’s business license tax revenue was up by $65,000.
Sales tax was expected to be $9,657,000 in June, and property taxes were estimated at $8,156,500. The business license tax was anticipated to be $1,122,000 in June as well.
One increased revenue source discussed Wednesday night was the city’s late payment and reconnection fees through the public works department.
Ayers said those fees, which are imposed when residents are late paying their utility bills or need to have their power turned back on, was up by $415,000 from June’s estimate of $900,000.
Councilwoman JoAnn Mounce said increased late payment fees might become a burden on some residents.
She noted that a resident who spoke during the water rate increase issue mentioned that the late fees had increased from $10 to $25. Mounce said that might indicate the fees have been raised too high.
“I certainly don’t want to profit in the hardship of our citizens,” she said. “If we’re making $415,000 more off these fees than we anticipated, I think that’s kind of shameful.”
Ayers explained that late fees are actually $10, $15 and $25, and they have not been raised.
“Residents have a 26-day window to make a payment,” he said. “On day 27, they are assessed a $10 late fee. If a bill remains unpaid another 10 to 15 days, you’ll see a $15 late fee.”
Mounce suggested the city consider if its current late fee payment schedule should be retooled.
Councilman Larry Hansen disagreed.
“I think we all understand that hardships for people sometimes occur,” he said. “But clearly, the late fee schedule is designed to encourage people to avoid (late payments).”
Hansen had other concerns with Wednesday’s report, which addressed the lack of officers in the Lodi Police Department.
Ayers said a lower-than-expected grant award was a factor. According to the report, a police department hiring grant was $225,350 less than expected in June.
He said $475,800 had originally been budgeted for the COPS Hiring Recovery Program grant, but Wednesday’s report actually shows $250,450 in funding.
There are currently three vacancies on the police force, and Ayers said four vacancies are needed to be eligible for hiring grant funds.
“We’ve applied for this grant. We were getting funding to put officers on the street, and not being able to live up to the requirements of this grant and losing funding is a concern,” Hansen said. “I’m going to want to know what brought this about and what we can do to turn this around.”
City Attorney Steve Schwabauer said the issue was the ability to hire more officers. He said when one retires, the city can’t simply turn around and hire a replacement.
“You have to have a minimum number (of vacancies) to receive funding,” he said. “And as you know, the hiring process is lengthy and there’s a lot of competition — particularly in our region right now — as our friends to the south of us literally hired dozens of officers in the last couple of years.”
Lodi Police Chief Mark Helms said that while there are three current vacancies, the department is expecting two lateral officers — or transfers from other departments — starting Jan. 6.
At the same time, he said, the department let two probationary officers go from a training program because they were not performing adequately, and the department is also expecting a pending retirement in 2014.
Helms said that he was just as frustrated as Hansen that Lodi has been unable to hire more officers.
“We struggle to fill these vacancies with quality people,” he said. “(The hiring process) is time-consuming, and we want to hire the best people for this job. Agencies are just coming out of a recession, so we’re competing with other police departments for the same people.”
Scott Brunner, director of Macias, Gini and O’Connell, said the city was “better off” than it was last year in terms of financial reporting.
His independent auditing firm gave Lodi a “clean” opinion in its report, which means the city has continued to prepare its financial documents in accordance with generally accepted accounting principles, as well as complied with all agreements and regulations to get grant funds and debt financing.
When asked how Lodi compared to other cities of its size financially, Brunner said there was nothing to worry about.
“You’re no worse off than any other city,” he said. “I think you’re in a decent position. You do have some debt out there. Some cities don’t have a lot, some have a whole lot more than you. But you’re not out of the norm.”
The report presented Wednesday will be submitted to the Government Finance Officers Association of the United States and Canada. The association presented the finance department with a Certificate of Achievement in Excellence in Reporting earlier in the evening. It was the 20th consecutive year the city has been recognized.
Contact reporter Wes Bowers at firstname.lastname@example.org.