At the February 25 City Council meeting, the City Council heard a mid-year budget update and discussed the development of the FY 2019-20 budget.
The City has a history of adopting best practices and approving proactive financial management approaches to provide great services to the community. Some of these steps include:
- Maintained 15% General Fund reserve levels
- Approved local pension reform two years before State action
- Dedicated funding for infrastructure and capital needs
- Strengthened the City’s fiscal position through the Financial Sustainability Plan
- Prioritized paying down long term liabilities
- Continued to contain costs through efficiencies, shared services, and innovation
These approaches have resulted in the City being recognized by outside agencies. In 2018, Moody’s upgraded the City’s credit rating to Aa1, which is the second highest rating a municipality can receive and the City received the Distinguished Budget Award from the Government Finance Officers Association. In addition, the City continues to receive clean audits from independent, outside auditors.
Building on these strengths, the City is working on several additional steps to improve the City’s budgeting and financial management:
- Developing a Ten-Year Forecast to provide a longer-term road map to financial sustainability
- Organizing a community engagement event regarding the City’s finances
- Considering new revenue sources
- Recommending a 2 year budget cycle beginning in FY 2020-21 in order to create efficiencies in the budget development process
- Assessing the City’s fiscal health using a League of California Cities diagnostic tool
- Exploring the option of an accelerated payoff time frame for pension obligations
- Implementing OpenGov, an online platform that will provide much more detailed and transparent budget information, performance metrics, and trends to community members
- Engaging the Government Finance Officers Association to review the City’s financial processes and procedures
Although the City is on solid financial footing in the near-term, the 10-Year Preliminary Forecast shows that the City will have a projected structural budget deficit of $4 million in FY 2022-23, and grow to a structural deficit of almost $18 million by FY 2028-29. For that reason, the City will continue to explore all the strategies identified in the Financial Sustainability Plan. At the City Council meeting, the City Council approved the following items:
- Use 80% of projected one-time FY 2018-19 General Fund year-end operating balance towards paying down pension liabilities and 20% towards the City Council priorities of housing, transportation, and children and youth
- Development of the final 10-Year Forecast to include additional annual contributions to pay down pension liabilities
- Confirmation of the FY 2019-20 budget principles including using ongoing revenue to fund ongoing expenses, using one-time revenues for one-time expenses and paying down long-term liabilities, and ensuring adequate reserves
The City Council also approved future dates regarding the FY 2019-20 budget development, including a June 10 submission of the proposed budget to Council Study Session and June 24 Budget Public Hearing and Adoption.
February 25 City Council Mid-Year Update Materials
NOVEMBER 6 BALLOT MEASURE RR VOTE UPDATE
On November 6, 2018 voters approved Measure RR by 67.7% supporting a sales tax increase to help fund City services. For more information about Ballot Measure RR, go here.
- Email the City: email@example.com
- Attend the June Budget Study Session: Attend the Study Session on June 10 at 7 p.m. at City Hall, Council Chambers
- Attend the June Budget Public Hearing and Adoption: Attend the Budget Public Hearing on June 24 at 7 p.m. at City Hall, Council Chambers
For more details about the Community Budget Workshop, go here.