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There are several key factors that you should consider as you prepare your budget requests for fiscal <br />year 2008-09. These include: <br />• Continue to Hold the Line, with Exception -Holding-the-line is first priority in our current <br />limited revenues environment. It is especially important that the City strives to achieve <br />balance between the costs of current services and the revenues to support them. <br />Departments are instructed to fully keep non-personnel cost increases to an absolute <br />minimum. Therefore, department budgets for services (5000 accounts), .supplies (6000 <br />accounts), and capital outlay (7000 accounts) should not exceed last year's budget totals, <br />with exception to increases resulting from contractual commitments or general inflation. <br />When submitting your budget, please make certain that details are provided to support these <br />increases. Departments are free to reallocate money between accounts; however, the bottom <br />line should not exceed last year's budget. Requests for additional personnel or part-time <br />hours continue to be discouraged. <br />~ New Proposals -Fortunately, the City has been able to continue its policy of no layoffs of <br />full-time employees as a result of the City's previous attrition planning program and <br />drawdown on reserves. In the event that new funding is identified, new proposals will be <br />categorized as requiring either "one-time funding" or an "ongoing commitment" of <br />resources. Accepted proposals will be funded according to the type of resource available. <br />New proposals will most likely be weighed for consideration according to the following <br />City Council priorities: <br />o Does the new proposal address critical and basic service? <br />o Can the new proposal be supported from an independent funding source (i.e. grant)? <br />o Is the new proposal cost recoverable from a revenue generating service? <br />• Cost Recovery - I encourage you to review your program fees and charges for services and <br />look for opportunities to recover a greater percentage of program/service costs. Be sure to <br />survey surrounding cities before submitting requests for fee increases, so that our program <br />fees and charges remain comparable. Requests for fee increases are due in the Finance <br />Department on February 8, 2008. We have included the current fee schedule in your <br />budget packets for reference. <br />As we work together in the upcoming months, I ask that each of you remain mindful that San <br />Leandro's economy is challenged, with a depressed real estate market and lower consumer <br />spending. Property related revenues continue to decline and the impacts of the State budget deficit <br />will become clearer over the next few months. Living within our means remains our best strategy. <br />I expect that you will give serious consideration to our fiscal concerns as you prepare budget <br />submittals for fiscal year 2008-09. I am confident that working together we will be successful in <br />addressing the financial challenges facing the City. <br />G:~BUDGEI12008-09~Budget Manual\Budget Preparation Guideline Memo 1-8-08.docx <br />