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Tuesday, March 22, 2011

Cassidy Promises Balanced Budget For Coming Fiscal Year

DESPITE AURA OF ECONOMIC GOOD NEWS, MAYOR PUTS SPOTLIGHT ON CITY EMPLOYEES TO SACRIFICE
By Steven Tavares

San Leandro Mayor Stephen Cassidy promised during Monday night a balanced budget for the coming fiscal year without the use of reserves or other accounting gimmicks.

“We must restore San Leandro to fiscal health,” said Cassidy during the annual State of the City address. The new mayor said the city will be prepared to offer a “truly balanced budget” in May. “The budget will not rely on transfers of one-time only funds to pay for on-going expenses,” he said. Cassidy declined the mayor’s monthly salary until the budget is balanced without the use of reserves, which are nearly exhausted. A recent estimate by Finance Director Tracy Vesely pegged the deficit for the next fiscal year at $1.26 million. The figure is significantly lower than the $7.3 million shortfall of less than two years ago.

Cassidy counted the passage last November Measure Z, which raises the city’s sales tax to 10 percent starting on April 1, as one of the reasons for the slight tinge of economic optimism. Cassidy, though, did not support the tax increase during the campaign. The influx of addition revenue was cited by Cassidy as helping to maintain the current police force, one ladder truck for the fire department, library services and avoid deeper cuts to city services.

Although, Cassidy cautiously commented on San Leandro’s slow, but positive growth, he also made reference to the specter of budgetary Armageddon during his somewhat robotic 30-minute speech. Hoping to avoid a “Vallejo-type fiscal meltdown,” Cassidy said the city must address pension reform, although, he said he prefers the term, “pension sustainability.”

“We need to recognize that one of the principle challenges for all local governments in the years ahead is how we can create quality services despite stagnant revenues,” said Cassidy before asking for labor unions and city employees to work with the city to control its increasing obligations to pensions and benefits, in general.

“The margin of error in our city budget is razor thin,” he said. “We need to specifically create on-going savings in the 2011-12 budget. This will help balance subsequent budgets without resorting to Draconian cuts or further increases in the sales tax.”

A city council work session on CalPERS will scheduled for April, Cassidy announced along with budget discussion beginning in May. The council hopes to have a budget approved for 2011-12 by the end of June.

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