HAYWARD | Oct. 17, 2011 | Hayward is looking at the possibility of again trying to shave away a multi-million dollar budget shortfall next year "if we do nothing," said the city's finance director.
The city, like nearly all municipalities in Alameda County, have cut millions from fiscal budgets over the past few years in the midst of the Great Recession. Tracy Vesely, Hayward's new finance director, told the council last week, she is projected a shortfall of $14.8 for the 2013 fiscal year and $18.4 million the following year.
By the 2014 budget, Hayward's current $28 million general fund reserve will be wiped out, she said, that is, in the unlikely event the city does nothing to ease the burden.
The lingering poor economy is the main culprit for stagnant revenues, she said, and few signs shows it brightening anytime soon. "All the latest economic forecasts are not showing any kind of market improvement," said Vesely. "There's a hint out there of a second recession. I don't know if that's true, but we are seeing it directly impact the city of Hayward's reserve."
Vesely forecasts just one percent increases in revenues for the next fiscal year and only one-two percent growth over the next few years. Like all cities, Hayward receive much of its revenue from property and sales tax. Next year, those two revenue sources will amount to over 55 percent of Hayward's income. If residents are not in the mood to buy homes or head on personal spending sprees, the revenues will continue to mirror the poor health of neighboring and national economies.
Vesely, who recently moved to Hayward City Hall from the same post in San Leandro, cautioned it is still very early in the budget process and the numbers furnished last week will change in one direction or another.
The presentation also appeared to give notice to the city's public employee unions they will again need to make concessions next year and in the future. All budget projections contained in the 10-year outlook did not include potential labor negotiations, Veslely said. Included are increased structural expenditures for 2013, highlighted by rising costs associated with health care for retirees, capital and maintenance needs and the loss of revenue from vehicle license fees. A $11 million in expenses next year is mostly related to labor costs, she said, including higher CalPERS rates and medical benefits.
In the meantime, there is much to do before Hayward residents get a clearer view of the budget for next year. A mid-year presentation is scheduled for early February, but the books for 2011 are not yet closed, said Vesely. The city will perform an official audit this week. Vesely said last year's budget concluding in June is still about $200,000 in the red.