City department heads spent a full day justifying their staffing
and budget numbers to the City Council, giving council members some
perspective on the proposed 2005-06 city budget.
City department heads spent a full day justifying their staffing and budget numbers to the City Council, giving council members some perspective on the proposed 2005-06 city budget.
Department costs total up to an estimated $106,376,631, including the general fund, redevelopment funds, expenses for city services and a $1.2 million deficit, but no layoffs. The new budget is almost $23 million higher than an $83.5 million document for 2004-05.
Most of the increase is due to several new city facilities coming on line – the community center and playhouse in early 2003, the aquatics center in June 2004, an indoor recreation/senior/youth center opening in August 2006 and the new library to open in 2007.
“We have a small, lean staff for a small service community – the new permanent reality,” said City Manager Ed Tewes.
To cut staff would mean a seriously big hit to city services affecting the public, a state of affairs the council has said it wants to avoid.
The picture is not as bleak as it might be, Tewes said.
“We are in a strong financial position,” he said. “Our CIP (capital improvement program that pays for new construction and repairs) is solid.”
The general fund (17.6 percent of the total) is different. Its expenses will come to $19,982,241; revenue – mostly from sales taxes – will reach only $18,732,301, though that is a 7 percent increase over 2004-05.
“We are rebounding with a third quarter in 2004, the highest in 10 years,” Finance Director Jack Dilles said of sales tax revenue. “We’re almost back to (revenues of) 2001.”
Tewes said that the sales tax increase is largely because of new businesses: Home Depot and the Ford auto dealership.
Sales taxes added $5.2 million to the fund in 2004-5; projected income for 2005-06 is $5,460,000.
The general fund pays for police (43.8 percent) and fire services (21.9 percent), recreation (15.4 percent) and park maintenance (3.7 percent) and for the offices of finance (4.9 percent), the city manager, city attorney, human resources and city clerk, all under 2.8 percent each.
Redevelopment Agency funds pay for building new city facilities, street improvements such as Butterfield Boulevard extensions and supports some affordable housing, a total of $38,471,053.
Recreation is the only department that has expanded in recent years, and only because of new facilities coming on line.
Deficits can be made up from the city’s reserve fund saved from more bountiful times. Because council has implemented a five-year plan to achieve a balanced budget, it plans to dip into the reserve fund for $1 million in 2005-06, but is counting on increased revenues in future years, ending up with a zero deficit by 2009-10.
A council subcommittee has been working on finding ways to bring in more revenue to reduce the deficit spending. Council in the near future will begin discussions on the possibility of increased fees or taxes.
One place the city may find new revenue is from fire inspections, now done for free. The city is talking to the Santa Clara County Fire Department about charging for non-essential inspections. Classes and fees to rent the community center and the aquatics center are going up, too.
Dilles said he hoped to find enough new revenue this year.
“If we do get $1.2 million in new revenue, we will reach our goals (of zero deficit),” Dilles said. “We won’t be increasing services but we will be holding our own.”
During the budget workshop the Public Works staff took council members through the Capital Improvement Program – the list of upcoming construction projects.
Deputy Director of Engineering Karl Bjarke told the council of new traffic lights at Murphy and Dunne and Tennant and U.S. 101, of work on Little Llagas Creek Trail and Llagas Creek flood control, a permanent fire prevention office at El Toro Fire Station, storm drain work at Hill and Dunne, sewer rehab work and water improvements, downtown traffic calming, repaving some streets, buying park land and improving park facilities, moving the Historical Museum to make room for building the new library and more.
In all, six categories of projects – parks, public facilities, sewers, drainage, streets and water – add up to $37,597,000.
Mayor Dennis Kennedy was out of town and did not attend the workshop.
The complete proposed city budget and Capital Improvement Program for 2005-06 can be seen at City Hall and on the city home page at www.mor ganhill.ca.gov/
Carol Holzgrafe covers City Hall for The Times. She can be reached by e-mail at ch********@*************es.com or phoning (408) 779-4106 Ext. 201.
