May 2019 Newsletter
Last week, the City Manager presented the City Council with a $1.2 billion budget proposal for Fiscal Year 2019-20. This proposal includes funding ongoing operations and increases in critical City services such as code enforcement, illegal dumping, additional police and fire staff, youth programs, economic development priorities, and many other things Sacramentans need and deserve.
The budget proposal also detailed potential revenues and expenditures over the next four years beginning in 2020-21.
· On the revenue side, City staff project an additional $50 million in new Measure U funds annually, and $4.5 million in annual cannabis sales revenue.
· On the expenditure side, there are numerous unfunded liabilities that need to be addressed:
City pension obligations to CalPERS will increase by $39 million over the next four years
Minimal contractual salary raises for City staff, estimated at $15-20 million, just to remain competitive with other employers. Most of the City’s labor contracts are expiring or have expired in the next year.
Roads, parks, and city facility deferred maintenance
What this means is that if we do nothing different, the entire increase in Measure U funds voted on by the City last November, approximately $50 million annually, could get eaten up without providing any additional City services. This is unacceptable as the Measure U campaign was run on a promise of significant City investments in inclusive economic development in our neighborhoods.
So what should we do? How do we continue to meet our obligations to our employees and residents while at the same time make strategic investments that will move the City forward? How do we take care of our neighborhoods, families and young people with the greatest needs?
I believe there are two main things we need to be doing.
First, we must ask critical questions on every budget decision for new investments. Namely, will this expenditure/investment make a positive difference in the community and will it lead to an expansion of our economy, and ultimately our tax base? If the answer is yes, we must then hold it up against all the other expenditures/investments we are being asked to make.
Second, we must take a very hard look at how we spend our existing budget to ensure that the City achieves intended outcomes in more effective and efficient expenditures. To this end, the City has contracted with experts in the field to provide recommendations on how the City could improve operations and programs, with final report to Council by this July.
By supporting and passing Measure U, the Council and the community made an agreement about how these taxes should support City investments. It may be difficult and will require much collaboration between the City and all its stakeholders to make choice to make sure that these investments can be met – something that we can accomplish together.