The proposed Walnut Creek budget: the “new normal” and tough times ahead

The city proposes to eliminate the crossing guard program, install new parking meters, raise parking fines, and cut funding for the downtown trolley service and the contract for animal services. Also on the chopping block? Thirty-three full-time positions.

As for some good news (I think), the city also proposes to increase fees for massage permits and to administer alcohol licenses.

These are just some of the solutions suggested for dealing with “the new normal” economic reality in Walnut Creek, according to the proposed budget for the 2010-12 fiscal year that the city just released.

As the document says: “The economy is expected to continue to be depressed over the next two years and even when economic recovery occurs, revenue recovery for cities will likely lag behind any recovery in the private sector. In fact, a full return to the prosperous revenue levels of a few years ago may or may not occur.”

In addition,“Local government officials have begun talking about a “new normal” to describe the major economic reset that reassessments of property value and changing consumer behavior seem to indicate.”

For Walnut Creek this means trying to “balance for the future.” That is, the city says it is trying to take into account those services residents truly rely on the city to provide in the next year or two, and into the future. 

Should the city continue to put an emphasis on building up its arts, recreation, and “learning” services, which would include the library? Or should more money be given to the police department. These are some of the big questions I often see debated in the comments section of this blog. These are some of the big questions I expect the City Council to discuss on Tuesday night when it meet to begin discussing the budget.

As it turns out, Walnut Creek,  perhaps more than other cities, puts a lot of focus on its arts and recreation programs. There are a fair number of people who think that in lean times, arts and recreation programs should be at the top of any public agency’s cut list. Other people believe that the Walnut Creek’s quality of life, as well as its sense of identity and future economic vitality, depend on it being able to run a top performing arts facility and to open a state-of-the-art new library.

Here are some of the major items included in the proposed budget, in terms of what the city is looking to cut, change, and accomplish. I'll be doing updates on this issue over the coming days. 

Money coming in—even if it’s not as much as before:

--Projected General Fund revenues overall for 2010-2011 total $61.3 million, a decrease of $1.5 million—or 2.4 percent less than estimated revenues for 2009-2010. For 2011-12, the projected General  Fund revenues total $62.9 million, a 2.6 percent increase over 2010-2011. 

--Sales tax “is projected to decrease by 6 percent  in fiscal year 2009-10,  decrease by another 3 percent  in 2010-11 and remain flat for 2011-2012. Sales tax collections in recent years have suffered from increased retail  competition in the area,  as well as the slowdown in sales of autos and other retail goods due to the softening local economy.  

--Property taxes: While property taxes are the largest source of revenue to the city's general fund,  representing approximately $16 million of the total, “secured property taxes are expected to decline by 1 percent in fiscal year 2009-2010, decline by 6 percent in fiscal year 2010-2011 and an additional 3 percent in Fiscal Year 2011-2012 (compared to 6-8 percent growth in prior years),. These declines are due to the sluggish housing market and economy and an increasing number of commercial and office vacancies within the city.  It should be noted that residential properties represent approximately 75 percent of the total assessed property valuation within the city."

--"Tax revenues resulting from the sale of both residential and commercial properties have declined by 75 percent over the last three years due to the conditions noted above, and are not expected to change significantly during fiscal years 2010-2012."

Where it’s going:

--The recommended operating expenditures for 2010–11 total $60.5 million, a decrease of $3.2 million or 5 percent less than estimated expenditures for 2009-10, primarily due to the recommended elimination of 33.36 additional full-time equivalent positions, the recommended restructuring of several programs, including custodial services and facility rentals, as well as the anticipated elimination of divisions such as reprographics, mail and warehouse services.

--Recommended 2011–2012 expenditures total $59.8 million, a 1.2 percent % decrease from 2010-2011.

What’s going/changing

--Eliminate funding for the school crossing guard program. 

--Discontinue “Movies Under the Stars."

--Discontinue school-year programming for teens, including the Youth Council, city support for three annual holiday-themed special events for children and youth, and the Teen Job Faire

--Stop funding for the Downtown Trolley and Shuttle Service, while other sources of funding are investigated for these services, such as grants, partnerships, and fees.

--In the police department,  freeze a police manager position, a watch commander/lieutenant position, a police dispatcher, and a police officer position

--Increase all parking fines by $5

--Eliminate funding for the contract with Contra Costa County for animals services beginning in 2011.

--Increase fees for taxi permits, dance permits, massage permits, and the adminstration of Alcohol Beverage Control (ABC) licenses.

--Cut temporary positions in the parks division

--Reduce financial support for the Lindsey Museum and the Gardens at Heather Farm Park.

--Eliminate a landscape maintenance worker position in the parks dvision.

--Reduce traffic cones placed at Homestead Avenue and Ygnacio Valley Road at peak times.