Increased revenue and discretionary funds forecast for the city of San Mateo in the upcoming budget cycle is leading officials to reinstate programs and hire new employees while still saving for long-term capital improvement projects.
At a meeting Monday night, the City Council discussed its estimated $205 million budget for the 2014-15 fiscal year and an approximate $7.8 million in breathing room due in part to increased property tax revenue and city employees who went without cost of living wage increases and took pension cuts during the recession.
With a balanced budget predicted for the next two years, a secure general fund and the council floating ideas to benefit the community, San Mateo’s proposed budget will be heard and voted on June 16.
Deputy Mayor Maureen Freschet said she was pleased with the upward financial trend predicted for the city.
“We are where we are because of the sacrifices of a lot of our employees and the hard work of our staff. I think [the proposed budget] is very optimistic, but yet conservative and so I appreciate that, because I think we’re headed in the right direction,” Freschet said.
The council outlined several priorities in February such as advancing the Central Park Master Plan, supporting downtown and the North B Street Initiative, implementing the Downtown Parking Management Plan and saving for deferred infrastructure needs.
With the future looking brighter, councilmembers proposed creating new programs and reinstating some previously dismissed due to the economy.
Councilman Jack Matthews said he seeks to revive the Shakespeare in the Park program, which would showcase three weekend performances during the summer starting the 2015-16 fiscal year.
“It’s very encouraging that we have some discretionary funds that we can bring some programs back and provide some better services to our community and we really have to because there’s a growing demand for a lot of the services that we need to provide that are very very crucial to our prosperity and safety,” Matthews said.
Councilman David Lim agreed arts and culture are extremely important and suggested the council consider setting aside $15,000 per year to help support its program and visits with San Mateo’s sister city Toyonaka in Japan.
Freschet proposed the council consider a program to provide one-time funding to seniors and those with disabilities who struggle to afford reasonable accommodations.
One of the city’s main goals during the coming years is to implement the recommendations made during the audit of its Community Development Department, particularly the need to hire new staff.
The council intends to add about 16 new employees throughout various departments. Still, the city is subject to an estimated $3.4 million increase in contributions toward retirement and benefit plans in the coming year. By 2020, those expenditures are predicted to increase by 44.5 percent for public safety employees and 70.1 percent for other employees, according to a city staff report.
Another daunting expense is the approximate $400 million needed for capital improvement projects over the next five years, said Finance Director Dave Culver. A hefty portion will go toward the city’s sewer system and portion of the wastewater treatment plant rehabilitation. In turn, the city will consider an 8 percent increase in sewer rates, according to the report.
The city’s sales tax revenue could face rocky waters in the years ahead due to the expiration of Measure L, a quarter-cent tax increase set to expire in mid-2018. However, with Gov. Jerry Brown’s proposed budget, the city can expect a one-time jump of 11.9 percent higher sales tax generated in the 2015-16 fiscal year, according to the staff report.
In taking lessons from the recession and striving toward a sustainable and balanced budget, Culver recommended using a new formula to account for the volatile nature of property tax revenue. The city will forecast future years by taking the average increase over the last three years as a base and combine that with the median over a 30-year period, Culver said.
San Mateo’s proposed fiscal 2014-15 budget will be heard and voted on at the June 16 council meeting. For more information or to review the proposal visit www.cityofsanmateo.org.
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Note to readers: This story has been changed. The city's budget for the upcoming fiscal year is $7.8 million higher than last year.