City Manager’s Transmittal Letter on the Budget

This is Mike Webb’s first budget.  Unlike past budgets there is no sugar-coating here.  Mike Webb makes it clear: “While not currently in a recessionary mode, the City does face now and will continue in the coming years to face fiscal challenges. There are indications that the decade-long streak of economic growth may be wavering, which may adversely affect revenues such as property and sales tax, reinforcing the need to continue diversification of our revenue streams.”

He lays out the consequences of inaction if the parks and infrastructure taxes do not pass.

And he lays out the warning that “the future costs associated with pension funds and retiree medical costs for personnel are increasing at rates faster than inflation.”

Here is the full text of the introduction:

I present for your consideration the City’s Proposed Budget for fiscal year 2018-2019. The budget is the primary policy document for the organization; it sets citywide service levels, implements capital projects and establishes the financial and human resources necessary to accomplish community objectives. This budget builds upon the goals and priorities identified by the Council over the past two years by focusing on infrastructure investments, fine-tuning of the city organization to make the best possible use of existing staff and resources, and with prudent spending aimed at meeting community needs at the highest possible level of service. It was developed in consultation with the long-range forecasting model, holding the line on staffing costs to add only one necessary new full-time position. And while this budget does not require programming and staffing cuts, the organization is ever mindful of possible downturns in the economy and the ongoing need to address the city’s long-term unfunded liabilities.

The Proposed Budget for 2018-2019 is one of cautious optimism. After multiple years of recessionary cuts to the budget, the last two budgets, as well as the 18-19 Proposed Budget, do not include cuts but rather stay the course of reductions made during those recession-era years. This new reality reflects staffing levels equivalent to those of the 1990s while our population and service demands have grown; continued efforts to provide services more efficiently, whether through technology, contracts, or streamlined processes; and assertive efforts to secure outside resources through grants and community volunteer efforts.

While not currently in a recessionary mode, the City does face now and will continue in the coming years to face fiscal challenges. There are indications that the decade-long streak of economic growth may be wavering, which may adversely affect revenues such as property and sales tax, reinforcing the need to continue diversification of our revenue streams. We currently have two revenue measures on the ballot: one to renew the existing parks tax and a proposed new tax measure to address funding for streets and bike paths. Whether these pass or fail will determine whether there are dedicated funding sources to address the identified maintenance needs in the coming 10-20 years. Finally, as the Council is well aware, the future costs associated with pension funds and retiree medical costs for personnel are increasing at rates faster than inflation.

It is the intent of the Annual Budget to tell the story of this local government – both the opportunities and the challenges, looking backward to the accomplishments of the past fiscal year and forward to the goals of the coming fiscal year – to the City Council and the general public.