City's budget under the gun City's budget under the gun (February 18, 2005)

Council looking at fourth year of making cuts

By Jon Wiener

For the fourth year in a row, Mountain View will be looking for ways to cut expenses or increase revenues to stave off a projected deficit in next year's budget.

City staff briefed the Mountain View City Council on Tuesday night during the first of many budget-related meetings that will take place over the course of the next several months. The message -- expenses are growing faster than revenues -- has become a recurring theme in the city since the dot-com crash.

"The bottom line is that we have a projected surplus this year, and we have a projected deficit next year," City Manager Kevin Duggan told the council.

If that had a familiar ring to it, it is because the council has faced projected deficits each of the last three years but has managed to balance the city's budget and maintain a high credit rating.

However, each decision to cut funding is becoming harder than the one before. "I think we're at the point now where the easy stuff has been done," said Council member Mike Kasperzak.

City officials agreed that, barring an increase in revenue, cuts will have to be made to programs that were once deemed to be of too high priority to get the axe.

Duggan said the council will need to consider creative ways to bridge the deficit in next year's budget, which the council is scheduled to adopt in mid-June. Some of the staff's suggestions included a citywide 911 access fee, asking downtown business owners to contribute more to the extra maintenance the area receives, and elimination of entire service areas.

"The people in this town are going to have to decide the true services the city offers. It's going to come down to that," said Council member Matt Pear.

The city projects a $5.6 million surplus in its general fund for the fiscal year ending in June. The surplus, which will help fund future capital projects like the extension of the Stevens Creek Trail, is the city's smallest in more than a decade. Duggan attributed the surplus to cost savings from payroll reductions and exceeding revenues from developer fees and sales tax.

But while the city staff estimated that general-fund revenues will at best stay flat next year at around $74 million, cost-of-living salary increases and retirement plans will drive costs up more than $6.3 million.

A hiring freeze at the city has been instrumental in helping shave $11 million from the general operating fund over the last three years. But with 60 positions, or 10 percent of the workforce already vacant, it is unclear what additional jobs can be trimmed.

The city's other funds -- including utilities, the Shoreline golf course and the downtown revitalization authority -- appeared to be in better shape, though Duggan said the Shoreline Regional Park fund would be hit hard by shrinking property tax revenues.

E-mail Jon Wiener at jwiener@mv-voice.com

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