Walking the Walk – II
Back in September of last year, shortly after I learned that our current year deficit was projected to be $1.1 million more than was projected just a few months earlier, I wrote a Council Corner titled “Walking the Walk” challenging us to make significant cuts in the deficit promptly. After the passage of only a few more months, we now believe that the deficit for this year will be even larger than what we expected back in September, with the current projected deficit exceeding $5 million out of a total general fund budget of about $30,000,000. That’s a big deficit.
Much of the further economic deterioration comes from reduced property taxes caused by the extreme softening in the housing market and by property tax appeals filed and granted to some large property owners. In addition, sales tax is down as well.
Since September the City Council has met frequently to come up with a way to deal with this deficit. As a result of those efforts we had initially scheduled cuts of about $1.6 million for 2011 – 2012. However over the past few meetings, some of those items seem to be creeping back into the budget and some on the Council are publicly advocating that we are already cutting too deep. The fact is, however, that based on the initial round of cuts, the projections for next year already show a deficit of more than $2 million, which coincidently or not is about the same number as the initial deficit projections were for in the current year. If we then add items back into the budget, rather than take more out, that deficit will only increase. Moreover, if the economy and the housing market continue to deteriorate and if other property tax appeals are granted, next year’s deficit could increase substantially.
On top of the economic problems we can deal with directly, we also have the state threatening to terminate our redevelopment agency and reallocate its funds for other uses, many of which do not benefit the City. Without those funds we will have no money for affordable housing which is not only a good idea, it is required by state law. Thus, if this does happen, we would have to find other sources of funds in order for any meaningful development to occur in the City. If that money has to come from the general fund, then our deficit will again grow accordingly. Continued development and redevelopment is essential to keeping Foster City growing and thriving.
Most cities throughout California are facing these economic issues from a much dire position than Foster City. The reason for that is, in part, conservative fiscal management by prior City Councils here in Foster City. Now, however, is not the time to stop being conservative, it is the time to be even more conservative with spending. If we do not really need it, we should not spend money to have it. It is just that simple.
My point in all of this is that just like in September when I wrote the first part of this article, I am again reaching out to you and asking that you support these concepts and that you are vocal about your support. I believe that continuing to add items back into the budget, being unwilling to make difficult economic decisions and resisting cut backs on spending is bad for the short-term and long-term future of our City.
We must live within our means and currently we are not doing so. We have a nice large savings account, our reserves, but at the rate we are using it, unless we take significant action it will not be there for very long. I think most of you agree with what I have said and so I implore you to make your voice heard. The cuts that have been proposed will change Foster City somewhat - I do not dispute that. But failure to make those cuts risk the loss and material reduction of essential services down the road. That, to me, is an unacceptable risk. Again, as I said back in September, the time to act is now.
Those are my thoughts. Tell me what you think. Share your ideas with me by email at email@example.com or call me at (650) 286-3504.
February 09, 2011
Walking the Walk – II
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