SR 05:167 - Laserfiche WebLink

OVERVIEW This budget maintains core service levels, addresses all new program and project initiatives prioritized by the City. These goals can be achieved with a spending plan that still operates within our fiscal means. Careful planning and a diversified local economy have allowed us to balance this budget without reductions in service or increases in fees or taxes. Even with our impressive financial standing compared to most jurisdictions, the City's spending patterns for the next few years should be closely monitored to ensure that our operating position remains positive. While revenue growth remains positive as the City's various business sectors continue to pay dividends and property values continue to grow, the economic benefits are being offset by rapidly escalating labor costs, ever-present threat of State revenue diversions and the sluggish economic recovery throughout the Bay Area region. For example, while the San Francisco Bay Area's economy is still feeling some lingering effects of the "dot com" bust, the East Bay including Pleasanton has fared better than much of the region. However, commercial space in Pleasanton's business/industrial parks and mall area is still only about approximately 87% occupied. While sales tax revenues are down significantly from their high in 2001, this important revenue source is starting to see a gradual recovery. Hotel tax revenue also peaked in 2001, then continued to decline through 2003-04, but now is starting to show some increases. Property tax revenues are the primary funding source for Pleasanton's General Fund. This revenue source has grown significantly with new commercial development in the last few years, as well as the resale market and recent construction of new residential projects. Housing resales in particular continue to show strong results, which will result in increased assessed values. In addition to the sluggish economic recovery and State budget deficit, increases in personnel costs add to the list of items that will impact the City's long term financial future. There are three factors that have driven personnel costs to exceed the inflation rate over the last few years. These factors are: workers' compensation, medical premiums, and the City's required contribution rates to the State's Public Employees Retirement System (PERS). According to a five-year projection prepared by staff and included in the budget, while these costs are growing, the City has some time to address these issues. There is also much to be optimistic about, for the City is well positioned to capitalize on the improving economy. In addition, the City is moving forward with plans for the 300- acre Bemal property, continued downtown revitalization, and the approaching opening of the Callippe Preserve Golf Course and Open Space. SR05:167 2