CITY MANAGER's budget crisis update

2/17/10

Since my the last budget update posted a few months ago, we at the City have continued to work hard on reducing our expenses where possible to meet our projected tax revenue drop and State Budget money grab problems this year.   At the beginning of the fiscal year in July we were projecting a $3.7 million shortfall mainly due to a sharp drop in the sales tax revenue, even after we had already cut $1 million from the prior year budget.  Then the State of California passed its budget with provisions that included withholding Property Tax and Redevelopment Funding from cities. 

If you have been keeping up on the Budget Crisis Updates you know that we began working on a list of 21 different cost saving actions that we devised to address the City’s budget challenges.   Some of the highlights, work in progress and accomplishments so far include:

• Operational Costs
• City Hall is closed one furlough Friday a month
• City hall business hours have been modified to allow for expanded service to the public Monday through Thursday while closing alternate Fridays
• Labor Negotiations and Personnel Reductions
• Six of the City’s seven bargaining units have agreed to concede raises and non-sworn staff has agreed to furlough an equivalent of 5% of their salary.  
• 32 positions are being held vacant, equal to a 12.5% reduction in employees
• Contracting Services
• Tree trimming and landscaping services contracted
• Possible Fire Department merger with the City of Huntington Beach
• City is analyzing an Orange County Fire Authority proposal for contracted fire services
• Possible Police Department merger with the City of Westminster Police Department
• Revenue Enhancements
• Revenue from the Shop Fountain Valley water tank sign adjacent to the 405 Freeway
• Shop Fountain Valley program promotion to increase sales tax revenue
• Proposed paramedic subscription fee to help offset the high cost of medical aide responses to residents in need of emergency medical attention
• Special Event Funding
• Summerfest, Tree Lighting Ceremony, etc. funded by donations this year

We thank you all for your support as we do our best to keep the City running well with less money.  As the holiday shopping season kicks off, we urge you to help support the community by Shopping in Fountain Valley.  Remember that when you make your purchases at home in Fountain Valley a portion of the sales tax goes to supporting important services the City provides. 

Sincerely,

Raymond H. Kromer
City Manager