3A Public Hearing 2012 0604 - Laserfiche WebLink

Home

File Number: 12 -272 The City Manager's Proposed Budget for 2012 -13 was presented to City Council on May 21, 2012. The budget represents the City's fundamental financial planning and communications tool, describing how resources are allocated to implement Council policies and goals, as well as providing the legal basis for the expenditure of public funds. Overall, the expenditure budget proposed for 2012 -13 totals $119.5 million. The City's General Fund accounts for $76.1 million, the SARA is $5.9 million, Enterprise activities (Water Pollution Control, Environmental Services, Shoreline Fund and Storm Water Fund) are $13.9 million and all other activities equal $23.6 million for 2012 -13. The General Fund budget reserves remain untouched for 2012 -13. However, $507,000 of 2011 -12 fund balance (carryover from 2011 -12 revenue appropriations matching related expenditures in 2012 -13) is used to close the revenue and expenditure imbalance. Consistent with prior City Council policy, an additional $300,000 transfer from the Community Impact Fund will be appropriated in 2012 -13. The City has reduced the General Fund budget by $2 million from 2008 -09 levels, including a 22% reduction to our workforce. However, the City would have faced even greater reductions if not for the infusion of new revenue from Measure Z, a temporary, quarter cent sales tax measure approved by over 60% of the voters in the November 2010 election. Measure Z's passage will bring in about $3.8 million annually in additional revenue, allowing the City to maintain existing service levels and begin to replenish reserves. Even with reductions in staffing and services, Measure Z's passage, and the beginnings of an economic recovery, the City still faces economic challenges. Indeed, the five year forecasts for all funds show that sustaining balanced budgets in subsequent years will be difficult. Budget preparation, analyses and revisions have become year -round endeavors. Staff began planning the 2012 -13 budget in the Fall of 2011, and started discussing it with City Council in February 2012. As part of the annual budget process, the City Council reaffirmed its vision for the City during its annual goal setting session in February 2012. These areas of focus help set the framework for the City's budget development. Since January, staff has continued this conversation with the Council Finance Committee and the City Council through a number of budget updates and budget work sessions that focused on budget forecasts, possible State budget impacts, effects of the Great Recession, the dissolution of the Redevelopment Agency, and the City's capital needs. Budget Analysis A number of factors influence the long -term fiscal health of the City: the slow economic recovery, the ability for San Leandro's revenues to sustain the cost of providing services, and the continued State budget gap. The 2012 -13 General Fund budget reflects revenue growth largely attributed to property tax revenues, sales and use tax and backfill revenues and utility user's tax revenues which constitute almost 80% of the revenue increase. Staff continued to perform a detailed line -item budget review of all funds and departments with minimal impact due to last year's findings of $1.2 million reductions. The forecast for the General Fund is a much improved picture from prior years, with a balanced budget for 2012 -13. However, the General Fund deficit reappears over the next four City of San Leandro Page 2 Printed on 512912012