February 17, 2009

City of Berkeley Budget Update

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Unknown State & Federal Impacts State budget unknown

-$17B FY 2009-$25B FY 2010-$42B Deficit (23% of budget!)

Federal stimulus package still in progress

Unknown how Berkeley will be impacted

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2-YR Budget…3-YR ProblemPERS rate spike in FY 2012

$600K loss of parking meter revenue Need GF reductions over 3 years of 6% Year 3 reflects PERS rate spike Assumes CIP funding reductions

Revised 3-Year Forecast - Not Balanced(in millions) FY 2010 FY 2011 FY 2012Projected Revenue $145.90 $148.90 $151.70Projected Expenses $149.20 $153.20 $158.30

Balance ($3.30) ($4.30) ($6.60)With PERS Rate Increase $3.00

Revised Balance ($3.30) ($4.30) ($9.60)

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FY 2009 General Fund Budget

Less public safety & fixed costs = $60M

Police34%

Fire17%

General Government

19%

Fixed Costs9%

Housing3%

Health & Recreation

10%

CBOs3%

CIP5%

$145.8 Million

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GF Balancing Framework

3-year Deficit = $9.6M

• Reduce expenses = $6.00M• New revenues* = $3.60M

$9.6M

*Raise parking fines $10 over two years

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Reducing GF Expenses

Administrative reductions Reorganizations Efficiencies

• Return on technology investments

Civilianization Shifts in funding source

Service reductions

$2.5M

$3.5M

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Reducing GF capital funding

(in millions) FY 2008 FY 2009 FY 2010 FY 2011 FY 2012City Facilities 1.3 3.1 1.3 0.7 0.7

Streets 4.0 2.8 3.0 3.0 3.0

Clean Storm Water 1.0 0.0 0.0 0.0 0.0

Transportation 1.1 0.5 0.3 0.3 0.3

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Other Revenue Funds Face Deficits

Public and Mental Health Funds• Expenditure reductions

Streetlight Assessment Fund• Possible General Fund subsidy increase

Refuse Fund• Rate increase in March 2009: 20-30%

Clean Storm Fund• Ballot in FY 2010

Permit Service Center Fund• Expenditure reductions

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Cutting costs now…

Hiring Freeze Cuts to Health & Mental Health Defer capital projects (pending State $) Limit travel & non-essential expenses No new programs Limit OT

• (eliminate for non-emergency/non-essential) Preparing for Federal Stimulus

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Principles of developing the budget

5-year budget model (3-year focus) Long-term solutions Engage/inform Council,employees, community Harvest creative ideas

• City staff, labor unions, citizens Streamline overhead Address unfunded liabilities Special revenue funds must balance on own

Need 5% more (cuts/revenue) to deal with uncertainties

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Organizing to improve services

Health & Human Services – Housing Dept HHS to focus on public & mental health Create Housing & Community Services Department

• Adding Aging Services & Youth Employment • Department focus now…

Community Services Homeless Services Housing

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Goals & Values

Maintain City’s long-term fiscal health

Provide quality services to residents

Recognize the exceptional work our employees do

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Program Focused Discussions

Environment…• Watershed Management Plan

• Climate Action Plan

• Zero Waste