By KATHERINE PETERSEN
Sunnyvale managed to balance its budget once again without any tax hikes or cuts, maintaining its position as an island in a sea of diminishing services.
The City Council held a hearing June 4 to gather input from residents before taking action on its budget and 20-year financial plan June 18, a process councilmembers go through every year.
Cities across the state have reduced services, City Manager Tom Lewcock said, but Sunnyvale has been a "little island," where some services have even increased.
Lewcock said many uncertainties still remain that could dramatically affect the city's position, because the budget was balanced on the assumption that the state would not cut funding further.
"It would not take a lot to change the situation," he said. "The state Legislature is looking at a bill now that might eliminate the city's construction tax, primarily on new development, that could lead to losses." The construction tax generates $750,000 per year in funding.
Lewcock said the city may not know many of the Legislature's plans until after its budget deadline has passed. He added that a tax initiative might appear on the November ballot that could affect the city's revenue sources.
Lewcock said the city may also have to contend with losses of grants that fund low-income programs, job-training programs and money for nonprofit organizations through potential consolidation at the federal level. In addition, the Federal Telecommunications Act of 1996 may affect the city's ability to collect franchise fees from such companies as TCI Cablevision, to the tune of $500,000 per year.
The city also faces the possibility of losing more local tax funding or spending more money to maintain paramedic services at the current level if changes occur in the system. Sunnyvale recently took over the $300,000 cost of managing its own animal-control program.
The tax-supported portion of Sunnyvale's general fund stands at $58 million, of which only $15 million could be cut. Money allocated for the Public Safety and Public Works departments, which equals about $40 million, cannot be touched or the city will not receive special taxes from the state.
Lewcock said the city has already implemented fees where it can, and any further cuts would come from the Department of Parks and Recreation or library services.
The city also has established a Community Recreation Fund to help recreation services become self-sufficient. The city is funding 15 percent of leisure services, down from 75 percent four years ago, when the fund was created. Leisure services include golf and tennis services, and programs for disabled people, seniors, youth and adults.
Any cuts in the department would come from the parks budget, not from recreation, which the fund protects.
In 1992, the city cut $150 million in capital projects, which allowed the city to sustain an annual loss of $10 million in revenue. Projects included a historical museum and a performing arts center.
Such a deep cut would be hard to make again, Lewcock noted. "Once it's done, it's done," he said. The city's only land use-related capital project is improvements on the segment of the Hetch Hetchy right-of-way west of Lawrence Expressway, a $400,000 under-taing.
This article appeared in the Sunnyvale Sun, June 5, 1996.
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