By Paul Myers
exeter – Exeter’s 2017-2018 fiscal year is expected to come with major cuts, reduced services and still end in a deficit. Last Tuesday, June 27 at the Exeter City Council meeting, three out of five members unanimously voted to pass a budget $345,000 in the red. As a result the City is expecting to tighten its belt, and that means moving away from some of the City’s regular contributions, including the chamber of commerce.
In the past, the City had contributed $30,000 to the chamber for operating expenses. Last year the budget allowed for a $7,500 per quarter contribution based on the revenue of that quarter. As a result the chamber received only $7,500 for the year. And now this year, the Council voted to cut out their contribution to the chamber entirely, despite advocates coming to the side of the chamber at the meeting.
“I feel the need to point out that there are three chambers who don’t get any contribution from their city: Woodlake, Farmersville and Lindsay. Please don’t let us become something else,” stated Cassie Alves, store manager for Hometown Emporium and president-elect of the chamber of commerce’s board of directors.
David Nielsen of Nielsen Insurance stated that he left Exeter and returned 12 years later. When he came back he was surprised at how much the city had changed and recognized the chamber for their part.
“[The chamber] helps us grow and makes us want to be a part of the community,” stated Nielsen.
But Exeter city manager Randy Groom noted before the council voted to pass the budget that they could not justify spending $30,000 when they are facing a deficit of more than $300,000.
“In order for [the council] to feel good about putting something in the budget, if you’re true to the accounting, they have to cut $345,000 more from the budget just to break even,” stated Groom.
As well, during the drafting process of the budget, the City recognized that it has been more generous than their counterparts and has given a larger percentage of their general fund to its chamber. In comparison, the City of Lindsay grants their chamber office space, and Woodlake is run by volunteers and non paid staff. The City of Porterville contributes $35,000 to their chamber out of their $28 million general fund making it a 0.0012% out of their budget. The City of Tulare contributes even less at 0.00031% of their $40 million general fund amounting to $12,500. Blankenship notes that Tulare’s contribution was at one time higher and a recent change in management could raise that amount. And last year despite only giving a quarter of what they have contributed in the past it still amount to 0.002% of their $4.4 million general fund.
Groom added later in an interview with the Sun-Gazette that a $30,000 expense to the City for the chamber would mean that the top 19 of Exeter’s downtown stores would have to increase their sales by 50% in order to recoup that cost. But that is not to say that sales taxes have been in decline.
Alves noted during the meeting the City’s sales tax has increased, over the last five years. Blankenship recognized that trend as well in recent interviews with the Sun-Gazette. But while sales tax revenue has increased it does not necessarily mean that retail sales have been the culprit, which the chamber largely engages in.
According to a MuniServices Auditing report, sales have increased by 10% between 2012 and 2016 and increased by 16% between 2009 and 2016. But Groom pointed out that a large sale of locomotives to the rail road in 2014 led to a $100,000 increase in sales tax, which could also disproportionately skew sales tax statistics.
But despite the amount the City is not giving to the chamber the larger problem that remains is the deficit. Cities around the Valley are entertaining ways to boost revenue. The most readily available option has been an increase in sales tax. However, the City is not prepared to explore the option of a sales tax ballot measure this year and will likely wait till 2018. But that may be too little too late for the chamber.
“In the next couple of years its going to come down to dollars and cents. We’ll be okay for the next couple of years but after that we’ll be in trouble,” said Blankenship.