$128 MILLION BUDGET BUOYED BY SALES TAX INCREASE COULD 'TIP OUT OF BALANCE EASILY' SAYS DIRECTOR
By Steven Tavares
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San Leandro will operate without the use of reserves for the first time since the 2006-07 fiscal budget, said Finance Director Tracy Vesely.
The state of the city's economy is anything but healthy, though. "It's a fairly precariously balanced budget," Vesely said Monday night adding many factors could push the city back into a deficit. "It's just balanced," Vesely said. "There's not a lot of flexibility here." In any instance, she said, "We will see that budget tip out of balance easily."
She says early indications of whether the projected fiscal budget can remain balanced will be shown soon with sales tax receipts ending in April beginning to be added to the city's coffers. "We'll be watching sales tax very closely," she said.
The expectation of greater proceeds from sales tax by way of the voter-approved Measure Z last November is credited by Vesely and City Manager Stephen Hollister as a main factor in the city's ability to balance the budget without reserves greatly depleted by the Great Recession.
The $128 million total operating budget features a general fund, at $78 million, still struggling to reach more robust levels from earlier in the past decade. Over $1.2 million in targeted cuts to various departments were used to even the city's books, but Vesely cautioned the city has done little but maintained last year's budget already loaded with significant reductions in staff and services.
"It is because the city council made a some very difficult decisions in preceding years that we have this budget," she said. Twenty percent of the city work force has been reduced over the past three years along with labor concession made by its employee unions. Many of the cities facing large deficits for 2011-12 such as Fremont are just now facing those same thorny discussions with its employees and residents.
The council also approved, to begin with next year, formulating a biennial budget to add some degree of long-term budget planning. In the past, it had relied on a yearly budget scenario. With increases in labor costs and expiration of current funding for services, the budget could begin to see its deficit growing once more. Funding from the federal COPS program allocated towards five police officers, for instance, expires next year leaving a gap for the general fund to fill.