GUSTINE – A city strapped for cash got some unexpectedly good news recently, when Gustine officials learned that the community’s assessed values – on which property taxes  are based – bucked a regional trend by climbing slightly.

Though the increase was minimal, it was a far better scenario than forecast by city officials in crafting their 2008-09 budget.

And Gustine was the only city in Merced County to show a gain in assessed values, according to City Manager Margaret Silveira.

Assessed values increased by 1.74 percent in Gustine, according to figures released Monday by Assessor Kent Christensen.

Countywide, assessments dropped 2.4 percent as housing values fell.

Gustine officials had predicted a 5 percent reduction in property tax revenues, which are a key source of funding for local government.

“It was a great surprise,” Silveira commented.

The increase translates into at least $20,000 more in revenues that the city had expected, she estimated.

Silveira said she believes that the completion of infill projects such as Medeiros Villas helped Gustine record a gain despite the sluggish housing market and plummeting home prices.

Silveira is concerned, however, that the housing slump will be reflected in next year’s assessments.

“Some of the negatives may come up more at that time, when more of the foreclosures that are sold impact next year’s numbers,” she predicted.

The countywide assessments reflect troubled economic times, Christensen stated.

“Clearly, the economic challenges facing our county and state are having a real impact right here at home,” he commented. “We have experienced economic downturns like this in the past, and I am sure we will again in the future, but like many I am hopeful that we are at the lowest point of this particular cycle.

Gustine and Merced County fared far better than their neighbors to the north.

Newman’s assessed property values fell by nearly 20 percent, and Stanislaus County saw an overall decline of nearly 7 percent.

The Merced County Assessor’s Office reviewed over 40,000 property records and lowered more than 21,000 properties to their current market value.

The assessor’s office will be sending some property owners value notice cards and property value reduction letters.

Residents who need assistance or have questions about their assessments are encouraged to visit the assessor’s office, located on the second floor of the county administration building at 2222 M St. in Merced or call 385-7631.

“Should county taxpayers have any questions regarding the assessment of their property, they should contact my office immediately,” Christensen urged. “I have only until Nov. 30 to make any necessary adjustments (to property assessments).”