City staff preparing major report on balancing municipal finances

Benicia City Council may get its first look this fall at a plan to correct its chronic fiscal uncertainty, Assistant City Manager Anne Cardwell said.

The Sustainable Community Services Strategy is the name given an effort to put Benicia’s municipal operations on firmer financial footing, in response to budget after budget becoming unbalanced during the recent recession.

In recent years, the city addressed a series of unexpected revenue shortfalls, including drops in property taxes, utility user fees and other income, by increasing layoffs, freezing or eliminating positions and cutting back on salaries, among other acts.

But those short-term fixes aren’t “a sustainable approach,” Cardwell said.

She said the sustainable fiscal strategy is being crafted to fix the city’s structural deficit.

Cardwell said it also is expected to address concerns that anticipated revenue won’t return to pre-recession levels, even as some key expenditures — such as California Public Employees Retirement Service, Workers’ Compensation and delayed expenditures on needed technology, infrastructure and capital replacement — rise.

Among the goals is to make the city operation a “sustainable organization,” Cardwell said, one that has the “ability to weather economic uncertainties without disrupting city services.”

The plan is designed to determine both the service levels desired by residents and local business owners and how much money it will take to provide those services in the long term, she said, as well as to make the city financially resilient so it can cope with future economic ups and downs.

The Council ordered city employees to craft the plan when it adopted the 2013-15 budget, asking for a comprehensive effort to match city resources with community service expectations.

Already completed are a series of financial studies, as well as a 10-year fiscal forecast that employees will continue to update, she said, adding that reviews of user fees, water and sewer operations and capital and vehicle replacement needs are under way.

In addition, the city obtained residents’ opinions about the city in a community survey and is analyzing the way the municipal government is organized, Cardwell said.

The first phase of development of the financial sustainability plan should be completed by spring, she said, and results of the organizational scan should be available for a March 24 study session.

But the entire plan won’t be ready to be adopted when the Council adopts its 2015-17 budget, Cardwell said, because the process was delayed through turnover of managers in several departments.

Still to come are meetings with the public, she said, during which residents and business owners will be asked to describe their city service expectations and learn how much those services cost compared to what the city has available to spend.

One new approach suggested by the plan: extending the city Strategic Plan’s scope from every two years, coinciding with Benicia’s budget adoption, to five years.

“There’s much to like” in extending the scope of the Strategic Plan from two years to five, Mayor Elizabeth Patterson said.

“A five-year-horizon Strategic Plan makes sense,” Patterson said, noting that such an approach is also recommended by the state.

The final version of the Sustainable Community Services Strategy document will be worked on through the fall and winter, Cardwell said.

Patterson said she hoped community meetings will include scenario planning so residents and business owners can see the results of the city operating “business as usual,” what it could do with unlimited resources, and what can be accomplished under financial constraints.

“Business as usual” hasn’t benefited the city, the mayor said. It hasn’t provided the city the necessary funds to handle unexpected revenue shortfalls, the severe California drought that caused the State Water Project to cut off Benicia’s primary water source, and other surprises that brought serious fiscal impacts.

“The scenario approach may be helpful,” she said.

Because additional assistance is needed to complete the plan, Cardwell also asked the Council not only to accept her report, but also to add $37,000 to its contract with Management Partners, the company that is helping in the document’s development. The panel did both by unanimous vote.

“This is something we’ve needed for quite some time,” Vice Mayor Mark Hughes said.