Click here for an updated budget message from Mayor Rosanne Foust (May 15, 2009)
Archived News Release from 2009
For Immediate Release
Redwood City Faces Budget Difficulties with Cooperative Effort, Shared Sacrifice, Attention to Community Services
Redwood City, CA - April 24 , 2009 – As the economic downturn continues to take an increasingly severe toll on local government revenues, Redwood City workers are pulling together to reduce costs in order to maintain crucial City services for the community. Through a combination of programmatic reductions, salary freezes, and use of reserves, the entire City organization is working diligently toward a workable solution to the ongoing structural deficit.
In addition to identifying significant programmatic reductions, all five of the City’s bargaining units as well as the Executive Group have agreed to a one-year salary freeze that is expected to save the City’s General Fund approximately $3.5 million through fiscal year 2010/11. This illustrates the strength of Redwood City employees’ commitment to ensuring the stability of the City’s financial future. The City Council will formally approve the plan at its meeting of April 27.
“The agreement for a one-year salary freeze really speaks to the remarkable group of people we have working here on behalf of the community,” said Redwood City Mayor Rosanne Foust. “I want to applaud all our City employees for cooperatively taking this difficult but important step for our future.”
The current economic situation is driving further deterioration of the City’s sales tax revenue, which is one of the largest sources of funds for Redwood City’s operations. This has pushed the anticipated deficit for the current fiscal year (ending June 30, 2009) up from an earlier estimate of $4.4 million to the latest projection of $5.8 million (on a general fund budget of approximately $85 million). The entire deficit for this fiscal year will be covered through the use of the City’s reserve funds.
The budget deficit projected for fiscal year 2009/10 also continues to grow, again due in large part to the continuing decline in sales tax revenue, as well as much slower-than-projected growth in property tax revenue. That projected gap now stands at $8.2 million. The Council has determined that two-thirds of the 2009/10 deficit will be addressed through programmatic reductions, in addition to the salary freezes, and complemented by use of reserves to cover the remaining one-third. In the two fiscal years after that, reserves are expected to cover 25% and 10% of expected deficits, respectively, with no further use of reserves anticipated after that point.
The City Council has directed staff to maintain some key guiding principles as budget reductions are considered throughout the City’s departments and services over the next three years, including:
- Ensure that budget sacrifices are shared, fair, and equitable across the organization.
- Pay particular attention to proposed service reductions that most affect the “front line” relationships with the community.
- Minimize reductions to services and programs that are preventative in nature, as short-term cuts in those programs may result in long-term, unintended impacts and costs.
- Leverage opportunities as much as possible with partner organizations, and explore long-term opportunities with other cities for shared services/resources.
With these principles in mind, the City is confident of crafting solid, workable solutions to this ongoing structural deficit, which take into account both the reality of the financial situation and the need to provide the services on which the community depends.
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