Structural Budget Deficit

By Bill Schwarz

According to the FY12 Budget for Foster City, Foster City has a structural deficit of $2.8 millions each year. This means that budgeted general fund expenditures exceed revenues by this $2.8 millions. I propose that the Council be more aggressive in addressing this deficit.

I suggest any voters who consider this deficit as unimportant vote for other candidates who will focus on other important issues as their priorities.

Some thoughts on how to address this issue.

There are four developments in various stages of approval or execution and a lease under negotiation that the City Council either has or will consider in due course. 1) The council should consider the impact of traffic resulting from each project. An example is that I understand that the developer will widen Triton at the developer's expense. This is fine and should enhance the value of this project. This doesn't address the additional traffic resulting from initially 300+ rental units and if fully completed 700+ rental units in this complex. There is also retail included in the project. This suggests an increment of 1500+ people living in foster City that will use 92 on and off ramps, Foster City Blvd, Hillsdale, etc. 2) The council should consider the increased consumption of city services, both safety and staff. One assumption in the Economic Impact Statement is that there will be no need for additional fire response personnel. My experience is that although we do not have many fires, the fire department is often the first responder for health incidents in my neighborhood. Given an increase in our resident population of 5% or so is this a reasonable assumption? 3) If fully built out and completed the forecast is for an increment of revenue to the city above incremental expenditures of $388k. Each approved development is an opportunity that we give up and will not have again within the foreseeable future.

City employees: All registered voters when considering the budget deficit should be aware that the cost of city employees is 78% of the General Fund expenditures. It will be difficult, barring a financial miracle, to balance the budget without the cooperation of our city employees. The two safety groups, fire and police, contracts expire at 6/30/12 and will be the responsibility of the new council to oversee negotiations. Some data items: Police and Fire personnel hired before 12/31/11 receive pension benefits of 3% of their salary for each year worked and can retire at age 50. Fire personnel hired after 12/31/11 will receive a pension benefit of 2% of salary for each year employed and can retire at age 50. The Management Employees contract goes through 2013 and offers 2.7% of salary for each year worked and can retire at age 55. As an example, if they worked for 30 years and retired at age 55 they will receive 80% of their salary upon retirement. The average cost of a city employee is $152,500 per year.