PARAMOUNT - Despite the statewide financial challenges of 2012, the city remains fiscally healthy, City Manager Linda Benedetti- Leal told the audience at the State of the City luncheon at Progress Park Plaza on Thursday.

"If there ever was a year that tested us as an organization, it was last year," she said. "It was a tough year, but we toughed it out."

With minor exceptions, the city was able to keep all programs, services and events intact, she said.

"The steps we've taken to correct our financial course have paid off," she said. "We were assisted by the continued trend of increased sales tax revenues."

According to Benedetti-Leal, 2012 total revenues were up 14.9 percent from 2011. The growth was partly due to new retail, but mostly to higher gas prices.

"We ended 2012 with the healthy beginnings of a capital reserve for future projects, a $300,000 surplus for the operating year and a robust reserve that equals about 50 percent of our annual upgrading cost," she said. "This is a very high level of reserve for a municipality."

The biggest challenge of 2012 was the loss of redevelopment, Benedetti-Leal said. California dissolved city redevelopment agencies in 2011 in order to bolster state coffers.

"This created a $4.5 million gap in our budget or about 15 percent," she said. "Some of this money funded operations, but the bulk of it paid for capital improvement projects.


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The city had to set up a system to ensure they had funds on hand for continued capital improvements, Benedetti-Leal said.

"To allow us to do this we did have to impact operations and unfortunately, layoffs were unavoidable and we did have to let 15 positions go," she said.

Over the past several years, through retirement incentives and now layoffs, the workforce has been reduced by 21 percent, she said.

As the state continues to struggle to get its "chaotic finances under control," local government has paid a price for that, she said.

"We felt the full brunt of the loss of redevelopment and we were also left to deal with other reforms from the state, such as the mass early release of prisoners to the local communities everywhere."

In 2011, Governor Jerry Brown signed Assembly Bill AB 109 and AB 117, legislation that allowed for the early release of thousands of low-level criminals.

Crime, however, is down 5.4 percent in Paramount from 2011, Benedetti-Leal said.

Another unexpected cost saving measure was the canceling of the municipal election.

"To run an election costs about $74,000," she said. "For the second time in a row, there were no candidates who filed to run against the incumbents. We were able to cancel the election and save the money."

In education, overall test scores are up, awards are numerous and several improvements happened within the Paramount Unified School District, said David Verdugo, district superintendent.

"Public schools are a community's most critical investment," he said. "Public education has always been the best way to level the playing field."

In 2012 Paramount Education Partnership fundraiser raised $83,600 for scholarships for Paramount kids, she said.

Over the past nine years, PEP has funded 157 scholarships to the tune of $425,000.

"By spiffing it up, shaping it up, sucking it up and stepping it up, we made it through 2012 in fine fashion and are positioned to continue with the progress this community has come to expect," she said.

pam.hale@presstelegram.com, 562-499-1476 Follow Pamela Hale-Burns on Twitter at http://twitter.com/PamelaHaleBurns