Clayton Facing Potential 12 Percent Budget Cut

If California's new budget for the fiscal year stays as is, Clayton could be looking at a significant budget cut.

The state budget's elimination of redevelopment agencies means the city could lose $425,000 (or 11 percent) from its 2011-12 general fund budget, City Manager Gary Napper told the City Council on Tuesday night. A.

In an interview Wednesday, Napper said the city could opt to pay the state $1.65 million to keep the agency this year (what Napper called a "ransom note"). That money could come only from the agency's affordable housing fund, which has about a $5 million surplus, because the remainder of the agency’s funds are reserved for previously-issued debt service.

The state budget also eliminates a portion of local vehicle license revenue for cities, which would have generated $38,500 for Clayton this fiscal year.

Therefore, about 12 percent would have to be cut by October from the general fund budget.

While some cities can cut staff positions to make up for the lost revenue, that's not an option for Clayton, Napper said. The city is already thinly staffed, with most employees shouldering multiple duties and tasks.

Napper wouldn't speculate where the 12 percent cut would come from, but said he has thought about possible solutions.

About 50 percent of Clayton's budget goes to the Police Department (13 employees) and about 23 percent is used for administration and finance (six employees).

One positive is the state's renewal of the COPS grant, which gives Clayton $100,000 a year for its Police Department, funding a police officer position. The city did set aside money for the position in case the grant was not renewed.