Budget Study Session Wrap Up

It was nearly standing room only this afternoon in the City Council Chambers as staff held a Budget Study Session with the City Council. This session was a follow up to the January 8th City Council Workshop which focused on methods to address an $11 million deficit in the General Fund.

Since January, every City Department has been working diligently to determine the most effective way to reduce costs while minimizing service levels reductions to the community. In addition, staff held four meetings with a City Council-appointed Budget Advisory Committee (BAC). The BAC came up with a series of recommendations to address both the short- and long-term budget challenges. The BAC presented a summary of their recommendations to the City Council back in April.

Today's meeting was held to review the BAC recommendations in more detail and get an update on the Budget situation from City staff. Updates presented today include:

*Revenue projections for 2009-2010 continue to decline--it has dropped another $600,000 since January--down to $28.8 million.

*2008-2009 net cash flow looks to come in about $2.6 million better than budgeted due to the cost-cutting already implemented by every department. Since we'd originally assumed about $2.0 million in current year savings, this additional savings offsets the lower revenue expecations.

*Taking into account 2008-2009 savings, we have a $9.3 million budget gap to close for 2009-2010

Recommended measures to close that gap include:

*Implement development fees that require full cost recovery

*Shift Landscape Maintenance District Responsibilities to City Staff

*Implement Employee Furloughs (already done)

*Freeze Vacant Positions/Review opportunities to consolidate positions (done)

With these actions, we should be able to reduce the gap to less than $3 million. Staff will continue to review additional actions to close the remainder of the gap. Since 85% of general fund costs are personnel, additional reduction in personnel costs are going to have to account for the majority of the additional cost reductions. There are obviously two ways to achieve employee costs reductions--either reduce pay or reduce positions.

As a service organization, it is my goal to preserve positions. Every reduction in staffing reduces our ability to serve the public. I will continue to work closely with our staff to see what we can do to reduce costs without losing any staff positions.

I'll be talking more about specific issues discussed at this session in future blogs. To review the power point presented at the session, click below.

Budget%20Workshop%2005_13_09.pptx