By: Melissa Stevenson Diaz, City Manager of the City of Redwood City
Interested in learning about the City of Redwood City’s budget? Here is a quick look!
This is the first of a series of budget updates on the City of Redwood City’s operating and capital budgets. Join the Conversation today by sharing your thoughts here.
Economic Outlook And City Budget Approach
While the economic outlook is strong, many experts anticipate a softening of the economy in the future. At the April 25th City Council meeting, the City Council approved a 4-phase budget approach in light of a number of moving parts including economic trends. To watch this City Council meeting discussion visit here.
At 3%, San Mateo County had the lowest unemployment rate in the State as of February 2016. The Peninsula, which includes Redwood City, has one of the fastest growing employment rates in the State of California. Strong employment influences all major City of Redwood City revenue sources.
Employees Serving The City of Redwood City Community
Of the 559 employees working within the City, most employees — 82% — are funded through the General Fund, supporting activities like police, fire, parks and rec, library, and administrative services. 18% of City employees are funded by utility funds (like water, waste water, capital funds, or smaller activities). Approximately 60% of the General Fund budget is dedicated to public safety services provided by our Fire and Police departments.
The chart below provides the City’s employee count by fund.
The City of Redwood City has a total Operating budget of $113.9 million for FY 2015–2016. Property tax and sales tax are Redwood City’s top sources of revenue, accounting for 60% of all general fund revenues.
Property Taxes-Compared to last year, City property tax revenues are expected to grow by an estimated 5%, or $2.2 million by the end of this fiscal year, for a total of $43. 8 million. Property tax, which has been strong, is expected to continue to grow over the next several years. As the City reaches caps on office and housing development allowed under the Downtown Precise plan, this pace will slow.
Sales Taxes-Sales tax revenue is the second highest source of City revenue. The City has experienced steady growth over the last 6 years, stabilizing this current fiscal year at an estimated $22.6 million or an anticipated 1% growth over 2014–15. It is important to note that sales tax has been a volatile revenue source over the last 15 years.
Primary revenue sources for the Capital Improvement Program include utility users tax, water and sewer fees, park impact fees, and transportation-related fees.
Together, these budgets support a wide range of community services. Comprehensive information about the City’s operating and capital budgets are available here.
The City ensures the City’s financial sustainability by funding preventative maintenance for City infrastructure — streets, buildings, parks, water and sewer systems — in order to avoid expensive emergency repairs. Other sustainability actions include: maintaining General Fund reserve at 20% of operating budget or higher; increased annual funding for workers compensation and general liabilities; continuation of three-tier retirement system and significant employee pension contributions to address rising pension costs; maintaining sufficient reserves for operating and capital needs for utility functions; and setting aside equipment replacement funds for vehicles and other high-cost equipment.
Capital Improvement Plan
The FY 2016–2017 proposed Capital Improvement Program (CIP) includes 65 projects totaling $32.3m in investments. Key projects include initial funding for the Veterans Memorial Senior Center/YMCA project, Middlefield Road Utility undergrounding and streetscaping, sewer system replacement/rehabilitation program, roadway pavement and management, Red Morton Armory Picnic/Play area renovation, and Kennedy Safe Routes to School.
Join the Conversation
City Council budget discussions are scheduled for June 13 and June 27.
To Join the Conversation and provide input into the proposed Fiscal Year 2016–2017 Operating and Capital budgets, visit here for details and share your thoughts!