In Lodi, home values are up. Foreclosures are down. And while it still has room for improvement, the city’s financial heath is getting better.
That was the gist of a 2013-14 budget overview for the Lodi City Council at an early morning study session on Tuesday.
Deputy City Manager Jordan Ayers went over the general economic state of the area, Lodi’s general fund and revenues. The assessment was generally positive, with a few cautionary notes, notably rising retirement expenses.
Property values have increased in each of the last six months, Ayers reported, hitting a new high since 2007.
He said that doesn’t necessarily indicate an entirely healthy market. Ayers said these values are due to resales, not new homes coming on the market.
Foreclosure rates in Lodi and elsewhere have improved markedly from one year ago.
In February 2012, foreclosure rates in the city were at 0.37 percent. That means just about four homes in every thousand properties were in foreclosure.
In San Joaquin County, the rate was 0.54 percent. California saw a 0.33 percent foreclosure rate.
This year, Lodi has a foreclosure rate of just 0.17 percent. In San Joaquin County, the rate is 0.22 percent. California is seeing 0.14 percent foreclosures in the housing market.
Unemployment rates have seen some improvement, though not as drastic as the foreclosure rates.
In Lodi in February 2012, the unemployment rate hit 12.8. San Joaquin County saw 16.7 percent unemployment. California had a rate of 11 percent.
This year, Lodi has an unemployment rate of 11.1 percent. San Joaquin County has improved to 14.7 percent, and California’s rate has dropped to 9.7 percent.
But the major concern for city staff and council members is the increases in CalPERS costs, the California Public Employees’ Retirement System.
“Now here’s some of the fear factor for the day,” said Ayers.
CalPERS recently announced major changes as part of their efforts to fully fund their program over the next 30 years. For Lodi, that means a $1.6 million increase in annual costs by fiscal year 2015-16. All of the cost increases will go to cities, not to individual employees.
It’s a steeper rise than in the past, Ayers said, and City Manager Rad Bartlam has concerns about the city’s ability to cover it.
“What’s keeping me up at night is, in two years, where do we find a million six to cover that?” he said.
The city has seen a small increase in revenue, up to $42,198,820 in 2012-13 from $41,909,940 in 2011-12. That comes from increases in sales and property taxes.
Sales taxes brought in $776,560 more than last year, an 8.7 percent increase.
There’s an estimated property tax increase of about $306,400, said Ayers, which is almost a four percent increase from what was anticipated. But the city doesn’t have final numbers yet.
In what Bartlam called the high water year, 2007-08, property taxes brought in $13.8 million. This year, they brought in $8.1 million.
“That gives you a sense that we’re still digging out of this,” said Bartlam. “We’ve been fortunate to replace car dealers with Costco. But we only get one Costco. That’s the downside.”
The city holds over $7 million in reserves, with $6.75 million set aside for catastrophic or economic emergency. That leaves just under $300,000 in general reserves the city has not earmarked.
Mounce asked if there were plans to hire more city employees or eliminate positions. She would like to see a part-time position added to the finance department to help cut those long lines at the payment window.
“That is the toughest job we have in administration, and I find it really hard to believe we can’t fix it,” she said.
City staff do not recommend adding new positions, according to Bartlam.
The presentation was one of a series of budget related study sessions. In the coming months, the council will hear reports on expenditures, special revenue and enterprise funds, said Ayers.
Contact reporter Sara Jane Pohlman at firstname.lastname@example.org.