Welcome to Budget Season
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Welcome to Budget Season

The annual Foster City Budget Season is officially underway with the meeting and subsequent direction setting that took place this past Monday (March 25).

For the past several years, we have had an unbalanced budget where expenses exceeded income. Since the recession that started in 2008, many municipalities including Foster City have found themselves in a deficit spending situation. In 2009, the sitting City Council decided on a policy direction of achieving a balanced budget by the 2013-14 fiscal year. That policy has been a work-in-progress and proceeding as planned. However, we are currently working on that targeted budget year and it is my expectation that Foster City will have a balanced budget for the coming year.

Since 2009, we have been faced with some obstacles such as a prolonged recession that some believe we are still experiencing, the housing market bust, and the ending to Redevelopment Agencies (RDA) to name a few, each of which have a negative impact on revenues. Foster City has held its own through the housing market crises with values going down much less than other nearby communities and it appears that housing values in Foster City are on the rise. We have been fortunate to have companies willing to invest in housing in poor economic times that committed affordable housing funds before the RDA dissolution.

It goes without saying that budgets are comprised of revenues and expenses. Our successes from the revenue perspective have included the passage of Measure P, an increase in Transit Occupancy Tax (TOT) that the Foster City voters approved in November of 2011. We have already seen positive signs of increased revenue as a result. It needs to be noted that any tax increases requires voter approval as we witnessed in recent State sponsored Proposition 30 this last November.

On the expense side of the budget, we have more immediate control. We have merged Fire Department administrative services with San Mateo in an effort to reduce expenses and this action continues to show positive results. This Foster City-San Mateo arrangement has recently included providing Fire administration services to Belmont and indications are that this arrangement is progressing favorably. We have reduced headcount through attrition and job responsibility reassignments. However, with the current volume of “baby-boomers” reaching retirement age, we have seen several department heads retire taking with them irreplaceable institutional knowledge.

Foster City has been a fiscally responsible city for many years due to responsible City Councils. However, there are many new challenges arising from external forces that we now have to address and must employ out-of-the-box thinking and creativity. We have to be even more diligent with the theme of doing more with less. Everywhere expenses continue to increase faster than revenues and have been doing so for some time.

The dissolution of Redevelopment Agencies has taken nearly $13 million from our ability to provide and assist with affordable housing. We now have to spend more time and money seeking out new funding methods and sources to provide State mandated affordable housing. The State instituted “Realignment” where prisoners under the responsibility of the State are being reassigned to county responsibility. With the modification of the Three-strikes law (Proposition 36) passed this last November, prisoners are being released earlier resulting in more pressure being placed on local law enforcement for repeat offenders at a cost still too early to quantify.

The Federal Government has been overspending for decades and is now looking at $1.1 trillion in cuts by 2021. This is important for us to watch because with the State already hurting financially, how much will the Federal cuts affect the State and how many government employees will see layoffs or furloughs? Either of these Federal actions does not bode well for our regional and state economy. We now have new terms to identify Federal overspending such as “Fiscal Cliff” and “Sequestration”. Once the State assesses the impact of the Federal cuts have on State coffers, financial responsibility for more things will in all probability be pushed down to the counties and cities.

I remain convinced that we as local elected officials must become more involved in regional and state issues as we all are affected by Federal, State, and County actions more than ever before. Yet, the focus on broader issues must not overshadow maintaining the quality of life issues we have experienced in Foster City. Foster City is and continues to be one of the better places in which to live and raise a family and it is hoped that the trend will continue.

I would appreciate your comments on this and other issues by emailing me at akiesel@fostercity.org or by phone - 650-573-7359.

Council Corner

April 03, 2013
Welcome to Budget Season
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