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City releases budget, 20-year projections
By Kelly Wilkinson
City manager Bob LaSala and city staff released Sunnyvale's upcoming fiscal year and 20-year budget projections last week, providing an opportunity to affirm the city's financial strength--as well as answer pointed questions from councilmembers.
City workers and a few interested residents nearly filled council chambers for LaSala's announcement that this year's $179 million budget is balanced. In addition, he outlined a 10-year resource plan and a 20-year financial projection, both of which are balanced for their respective time spans.
"The budget is a very complex one, but we're certainly in good financial condition," said Mary Bradley, director of finance. "We're not filthy rich, but we're funded over the long term, and that's a real key point."
Both Bradley and LaSala emphasized the long-term aspects of Sunnyvale's budget, which Bradley called "almost unique" compared to other cities.
"[Twenty-year projections] really help us because there are trends that occur far out that we can identify ahead of time and make small corrections," she said.
The 20-year projection is based on existing tax revenues and services, and also includes room for infrastructure replacement. According to Bradley and LaSala, it enables the city to make longer term plans and better predict financial patterns. One of those critical trends is identifying when total costs will overtake income, which is protected for the fiscal year of 2017-2018.
"That's the beauty of this kind of planning," Bradley said. "When you identify that years ahead, you can take lots of smaller steps to correct it."
Community Relations director Dave Vossbrink likened the long-term projections and subsequent adjustments to charting a sailing course for Hawaii.
If you set out for Hawaii with a compass and make corrections every day you'll never get too far off course, he said. But if you never look at the compass or look up to see where you're headed, then you'll end up in Alaska.
"And Alaska isn't where you want to be if you set out for Hawaii," he said.
But several councilmembers including Stan Kawczynski and Julia Miller raised some questions about how sound the budget is, specifically calling attention to a lack of funds planned for the proposed senior center.
This past July, councilmembers unanimously approved plans for a new senior center, and while last week's proposed budget contained operating funds, it did not include construction costs.
"If the costs come in at $8 million and we don't have that money in the budget, I'm out $8 million somewhere," Kawczynski said. "So it doesn't really balance."
In response to the concerns, Bradley said last year's budget provided an extra $5 million in unexpected revenue, which she said has been put in a "non-recurring events" reserve.
"We knew that the senior center was on the horizon, so that's sitting there untouched," Bradley said. And while she said it isn't specifically off-limits for any other potential projects, "it is a logical place for council to go for at least a substantial part of it."
Kawczynski also interpreted the budget as moving from a more sales-tax based revenue system to money captured in permits and fees.
"Once you start moving the budget towards being more fee-structured, then development dramatically increases, and that concerns me."
LaSala said although the short-term looks solid, he did acknowledge "there are other economic, social, demographic, and technological trends that threaten to erode our tax revenues over the long term."
He included the shift to electronic commerce and a change from a manufacturing to a service-based economy in his list of potential hazards, saying that the current sales tax system should be as relied upon in the future for as much revenue.
"The current state-local tax structure--constructed when most local and regional economies were tightly bound to geography--cannot adapt to these trends in which city boundaries are blurring," he explained.
But Councilmember Jim Roberts said he feels certain that the federal government will resolve issues of electronic commerce stripping cities of their sales tax revenue, and added his positive endorsement to the workshop.
"Overall, the budget is in excellent shape," he said. "We're balanced out for 20 years with no decrease in services and no increase in taxes."
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Sunnyvale, California Since 1994
