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If Council Approves City Mgm't/Mayor Proposed Budget As Is, In One Year From Now City Mgm't Expects Deficit (Spending Exceeding Revenue) Of $7+ Mil Plus Nearly $8 Mil More A Year Later. We Ask Mayor's Office About This And It Says...


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(July 29, 2015) -- As reported in detail yesterday (July 28) on LBREPORT.com, the City Manager's proposed FY16 budget and Mayor Garcia's recommendations basically propose to maintain City Hall's spending status quo with some enhancements...although city management acknowledges that it expects a roughly $7.5 million deficit (spending exceeding anticipated revenue) one year from now entering FY17 with another $7.8 million deficit a year later in FY18 [source: city management Power Point, p. 16.]

The city management FY16 Power Point states, "The FY16 Budget prepares for future by applying the $630K temporary surplus to reduce the FY17 deficit" (on grounds the 630k surplus isn't structurally spent, and thus reduces the expected FY17 deficit from $8.1 to $7.5 million.

Mayor Garcia's budget recommendations include this mention: "This [proposed FY16] budget leaves $630,000 available to reduce next year's projected structural deficit, as well as $630,000 in one-time dollars for the Council's Budget Oversight Committee to develop recommendations for the full Council's consideration and adoption." [Mayor's recommendations, p. 1.]

But if City Hall is facing a $7+ mil deficit one year from now and nearly $8 mil more a year later, why isn't it gradually reducing spending now instead of running into big budget issues starting one year from now? We asked the Mayor's office for a quick reply and Chief of Staff Mark Taylor last night emailed us the points below:

[Scroll down for further.]






[Mayor Garcia Chief of Staff, Mark Taylor, July 28 p.m. email reply]

This budget takes a number of steps to prepare the city for future deficits.

First, the budget does not include any new structural increases in spending for new services. It funds existing services, commitments made by the City Council, or other required expenditures necessary to provide and sustain the current level of services.

The recommendations made by Mayor in the budget are made through one-time expenditures that do not increase the structural deficit.

Second, the budget permanently reserves $630,000 in structural surplus to be applied against the deficit next year, making the FY 17 deficit smaller. The same approach was used in previous budgets, which helped result in small surpluses for the past three years, when deficits were previously predicted.

Third, the budget makes investments that will reduce the City's deficit in the future. For example, switching to LED lights will eventually result in large energy savings and lower electric bills. We hope to achieve savings from the street sweeping rerouting that will reduce the future cost of street sweeping. The Innovation Team will work to improve economic development in the city, with the goal of creating additional revenue and creating additional jobs.

This budget is structurally balanced, and fiscally prudent, while making appropriate and necessary investments that will pay dividends in the future.

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Between now and September 15, the City Council -- which ultimately decides budget spending priorities -- will hold at least one Council study session (afternoon Aug. 4); the Council's Budget Oversight Committee (Lowenthal, Price, Mungo) will hold meetings (unclear on what budget areas; public testimony invited, but only reaches 3 of 9 Councilmembers) and city staff will hold community budget meetings in various Council districts to explain its proposed budget (public input taken but Councilmembers not always present to hear it,)

In the first half of September, a City Council majority will hold two budget hearings (with public testimony) and ultimately decide whether to tweak or make major changes or accept basically as-is a FY16 budget subject to a Mayoral veto that six Councilmembers can override.

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