Riverside OKs Spending Plan, Avoids Layoffs

The Riverside City Council on Tuesday unanimously approved a spending plan of nearly $566-million for the coming year, including money to build a power plant and for beautification projects and athletic fields for children.

Without comment, the council voted 7 to 0 to approve the budget for the Inland Empire’s biggest city for the fiscal year that begins July 1. The budget is about 11% larger than this year’s and calls for no layoffs or service cuts.

“We’re holding our own,” said Jim Smith, the city’s budget director. “The economy here is still pretty strong.”

Riverside, like other Inland Empire cities, is in better financial shape than many in Southern California because of strong job growth and a vibrant real estate market. Those factors have created a steady tax stream that has allowed it to add $22 million to its reserves in the last three years.

City Manager George Caravalho said the savings “will help cushion the blow” from the state budget crisis.

The plan also includes $116 million for capital improvement projects, including $55 million for a 50-megawatt power plant that will help ensure power during the hottest days of summer. It also includes funding for 20 acres of sports fields and beautification of the entry points to the city.

The general fund, with $148.8 million, has grown nearly 4% from last year. Nearly two-thirds of that money will pay for police, fire and other public-safety services. The remainder will pay for parks, public works and other government services.

General fund costs would have grown more than twice as much had city officials not cut $9 million in non-service related costs, such as travel expenses.

In recent years, general-fund spending has outpaced revenue because of growing pension costs and other expenses. In next year’s budget, the city will spend $7 million more from the general fund than it takes in. The gap is being made up through funds from other sources.

Smith said the city will work to balance its spending within a few years, but that will mean taking a hard look at labor costs. Early retirements, a strong employee benefits package and the sluggish stock market have caused pension costs to spiral.

“That’s going to be a tough challenge,” he said.