For the first time in seven years, the city of Sacramento has a budget surplus.
City Manager John Shirey released a budget Monday that resembles the spending plan of a city on stable financial ground. Shirey is projecting a nearly $2 million surplus for the 2014-15 fiscal year that begins July 1, with another surplus predicted for the following year.
The budget includes the full operation of each of the city’s swimming pools that are in working order, additions to programs targeting blighted properties and aiding the homeless, and the addition of 14 police officers to city streets.
No layoffs are in the budget. Common spending cuts of the past – including employee furloughs and rotating closures of fire department rigs – have been removed. The city will also add $400,000 to its budget reserve.
“From a city services standpoint, we are maintaining and, in a couple of places, making enhancements,” Shirey said.
Since 2007, the city has addressed cumulative deficits of $243.5 million. The cuts have slashed more than 1,000 positions from the city workforce and programs across the city.
The renewed stability stems in large part from increases in property and sales tax revenue over the past year after a long stretch of decline. More than $29 million in spending will also come from Measure U, the half-percentage-point sales tax increase approved by voters in 2012.
“This is a positive news budget, but it doesn’t mean we’re out of trouble,” Shirey said.
Due to increases in employee costs – especially the city’s contributions to employee pension funds – Shirey and budget officials are projecting deficits to return in 2016. Those deficits could reach $40 million by 2019 if voters do not extend the Measure U sales tax after it expires that year.
The city is budgeting $49 million for employee pensions in the current fiscal year. By 2020, the number will rise to $82 million. Between pensions and retiree health care costs, the city is facing $1 billion in unfunded liabilities in future years.
If Measure U is not extended, Shirey said, the budget would remain stable in the long run only “if there is a miraculous increase in our revenue.”
In the upcoming fiscal year, Measure U money will support libraries, parks maintenance, police protection and fire department staffing. Many of those services were drastically reduced during the economic downturn.
Shirey’s proposed budget also calls for $300,000 and two staffers for the Justice for Neighbors program, an initiative of the Community Development Department, Police Department and City Attorney’s Office. The program targets property owners who allow homes and lawns to become blighted.
A position will be added to the parks budget to help with homeless programs. And four positions will be added to a digital and technology program for city employees that will “streamline business processes and create efficiencies citywide,” according to the budget document.
The city animal shelter will receive $197,000 in extra funding for food, medical supplies and veterinarian services.
The eight City Council members and Mayor Kevin Johnson will see their office budgets increase by a total of $392,000.
The council will receive its first public briefing of the budget on May 8 and is scheduled to adopt the budget June 10.