■Clovis budget experts say expenses are outpacing revenues.

■It could lead to a general fund shortfall of $14 million in five years.

■Councilmembers want to protect public safety.

Expenses are outpacing revenues, which could put the city’s general fund $14 million in the hole by 2029, city of Clovis budget experts are warning.

The city’s budget experts are cautioning the council to plan ahead.

“If we continue to do the same thing that we’re doing and don’t do anything about it, there’s a chance that we’re gonna run into problems,” City Manager John Holt said.

Holt presented the five-year forecast to the city council on Monday.

“This forecast is a snapshot in time and an approximate view of what could occur in the future if all the assumptions are realized. As with any forecast or prediction, the assumptions and projections for the nearer years carry more certainty and confidence than for the years further into the future,” the report said.

The city’s budget staff expects a $1.3 million revenue shortfall starting Fiscal Year 2024-2025. The deficit could increase to $4.2 million in FY 2028-2029.

Expenses Increase

Every aspect of expenses has increased, finance director Jay Schengel said.

“There’s no sense of, misuse or abuse in any of the line items. They are what they are, but they are all growing — salaries, benefits, services, materials, supplies, you name it. We’re all feeling it at home and we’re feeling it at the city as well. Our revenues have slowed down compared to our expenditure growth,” Schengel said.

Holt said this will lead to a scaled-back budget.

“Over the past 15 years, we have asked all the departments to do more with less. And I don’t know if we can continue to do that and maintain the level of service that our customers have become accustomed to,” Holt said.

While the city’s population is expected to rise to 136,000 over the next five years, the only new planned staff is 15 police officers.

Sales tax has declined two years in a row between 2022 and 2024, 3% over the prior year — a $2 million shortfall. However, the city’s budget team expects the figures to stabilize.

Property taxes will be up $0.9 million, but other fees the city collects will be down minimally.

Expenses are more than revenues for water, sewer, and community sanitation. A water rate study is ongoing. The forecast assumed a 3% yearly water rate hike.

CalPERS costs — the retirement plan for employees — are expected to double, from $10 million to $20 million, in five years. Market returns haven’t been what was expected.

High inflation is also a problem, Holt said.

The budget challenges have halted contributions to the city’s emergency fund. The city’s reserves, though, will remain at 15% — below the 25% stated goal. There will also be no transfers for capital projects.

The city’s financial situation was better in the immediate post-COVID years, because of budget preparation and federal stimulus funds, budget staff said.

“We do have time to adjust,” Holt said, noting the benefit of a five-year forecast.

Councilmembers React, Want to Protect Public Safety

Councilmember Drew Bessinger said he doesn’t want to be “the city of no.”

“We’re going to have to tighten our belts. We’re going to have to watch this. The forecast may be OK, but I think we have to be prepared to do some potentially draconian things, and I’m hoping we don’t have to do that,” Bessinger said.

Holt warned that the level of service Clovis citizens expect such as police could be reduced.

Councilmember Matt Basgall, former city police chief, said laying off police officers is not an option.

The city of Fresno also anticipates a $10 million shortfall in the coming year’s budget.