The City Council adopted the current Fiscal Year (FY) 2009-10 Budget, designed to address the deficit created by the current economic downturn. Originally, the FY 2009-10 General Operating Fund budget was estimated to have a $6.1 million structural deficit (on a $86.5 million base; representing a 7.1% shortfall). The budget is being impacted by the global recession, which has resulted in decreased property values and consumer spending, among other impacts.
The City Council adopted a budget that reduced the structural deficit by approximately $3.9 million through a combination of reductions in services, programs and modest revenue enhancements. Subsequently, the City Council adopted modifications to compensation for employees, in collaboration with employee groups, of $377,000 reducing the structural deficit further. After final compensation calculations including final medical rates which came in lower than anticipated, the adopted structural deficit was reduced to $1.6 million. Recognizing the significant impacts of achieving the additional $1.6 million of deficit reduction, the new budget utilizes Budget Contingency Reserve (“Rainy Day Fund”) funding to eliminate the remaining deficit, allowing additional time to address the remaining structural deficit.
In conjunction with adopting the Fiscal Year 2009-10 budget, a goal was set to achieve a structurally balanced General Operating Fund budget for Fiscal Year 2010-11. This goal is considered fundamental to the City’s ability to regain its fiscal stability when the economy recovers. The fiscal challenges ahead are considerable. As a consequence, the City is beginning the budget process early (in the Fall), in order to review all alternatives to addressing this challenge. For more information, call the City Manager’s Office at (650) 903-6301.
The City was challenged to develop a balanced General Fund budget for FY 2009-10 that limits impacts to services. The City considered many alternatives to meet the fiscal challenges. The budget process for FY 2009-10 focused on trying to limit expenditures while preserving City services. Budget recommendations were developed in a phased process, as new information became available for consideration by the City Council. The overall FY 2009-10 Budget was completed in June of 2009, and included the following public meetings:
