City budget forecast is slightly improved
Article Launched: 05/18/2007 02:07:10 PM PDT
City staff breathed a sigh of relief, if only for a moment, when it reported to Fremont City Council that there would be $133.7 million in Fremont's general fund for 2007. Catherine Chevalier, the city's budget manager, said this figure was $600,000 more than what had been reported to the council in March. However, expenditures will remain at $130.5 million, as was reported in March, leaving the city with $9.3 million in its general fund by the end of the 2006/2007-fiscal year. Chevalier said the primary reason for the income increase is due to some $800,000 in other revenue sources, such as reimbursement for state-mandated services like the animal adoption program. Fremont Finance Director Harriet Commons said because the governor's May revise for the state budget was released May 14, the city had no time to review it. This results in the city not knowing when it will receive $800,000 in other revenue. The increase in an ending general fund balance comes a year after the city reported that it was virtually broke. Last year, city officials reported $118.8 million in revenue, but $122 million in expenditures. As a result, the city had to transfer $1.4 million from its Budget Uncertainty Reserve, a "rainy day fund," to bring it out of the red. Also, city officials projected this fiscal year would be even more uncertain. Although city officials said they are happy with the revenue and general fund increase, more spending is forecast for next fiscal year. For the 2007/2008-fiscal year, the city projects bringing in $141.4 million in revenue, but spending $147.2 million. However, the city will still be in the black overall, with $3.5 million remaining in its general fund by the end of the year. The general fund balance will then again increase by the end of the 2008/2009-fiscal year, as the city expects to generate $149.3 million in revenues, and only spend $146.2 million. That will leave the city with an estimated $6.6 million in the general fund by June 30, 2009. According to Commons, the city is not worried about the drop in next year's general fund balance. She said next year property taxes are expected to increase from $45 million to $48.2 million, although there haven't been as many home purchases in Fremont as there have been in recent years. Additionally, sales taxes are expected to increase from $34.6 million to $36.6 million. With this budget increase, city staff is proposing 18 new public safety positions. On Tuesday, city staff will officially propose that the city hire 10 new firefighters and eight new police officers. But these additions will still not give Fremont the same amount of public safety positions as other cities in the area, Commons said. According to staff reports, the additions will only give Fremont 2.2 public safety personnel per 1,000 citizens. In comparison, Newark has 3.5 safety officers per 1,000 residents; Oakland has about 4.25. Additionally, staff is suggesting turning seven temporary city positions into permanent positions, including three in Fremont's Human Services Department, two in Fremont Community Development Department and two in Fremont Transportation and Operations Department. "Based on this information, we think revenues will be enough to absorb the ongoing costs of these new positions," Commons said. Fremont City Manager Fred Diaz said the city is pursuing retail opportunities throughout the city to help increase revenue, as sales tax is the city's primary driver.
Diaz mentioned projects like the Central Business District and Centerville Market, along with the Oakland Athletics' ballpark village, as potential revenue generators.
"We've been through some challenging times in the last few years, and we remain skeptical," he said. "We're approaching next year with caution, but things are looking up."