Finance Highlights 2011 0617 - Laserfiche WebLink

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CITY OF SAN LEANDRO MEMORANDUM DATE: June 17, 2011 TO: Finance Committee FROM: Stephen L. Hollister, City Manager BY: Tracy Vesely, Finance Director SUBJECT: Biennial Budget Process for City of San Leandro SUMMARY AND RECOMMENDATION Staff recommends that the City Council defer the implementation of a biennial budget process for one fiscal year, commencing a two -year budget process with the 2013 -14 & 2014 -15 fiscal years. DISCUSSION On June 6, 2011, City Council adopted a biennial budget process for the City of San Leandro, commencing with the 2012 -13 & 2013 -14 fiscal years. This decision followed discussions with the Finance Committee and City Council regarding the positive aspects of implementing a biennial budget process. While it was acknowledged that this change would require considerable system programming changes and staff resources, staff was confident that they would be able to implement the process — largely because of the Finance Director's past experience with biennial budgets. The department has lost about 22% of its work force during the last three years and, like many other City departments, is struggling to provide a high level of service and maintain adequate internal controls with diminished resources. The recent announcement that the Finance Director will be leaving, further erodes the department's resources and ability to implement this significant change. A primary reason for a biennial budget is to provide a longer -term perspective on the City's fiscal health. It is an excellent planning tool that allows City Council to make more informed decisions regarding City resources. However, an equally critical (if not more important) planning tool is the multi -year forecast. Following the direction of the Mayor, staff introduced multi -year forecasts for all of the City's revenue funds with the FY 2011- 12 budget. The multi -year forecasts frame the budget, providing long -term perspective on City resources, and allow the Council to understand the implications for financial decisions that have impacts on future years. While staff still supports implementing a biennial budget, we ask that Council reconsider the timing of its implementation. Finance Department staff will continue to maintain and update the multi -year forecasts, which will allow Council to make decisions based not only on one year — but on the budgetary impacts for the next four (or more) years.