City Budget Includes Unpaid Furloughs, Service Cuts

City employees will have to take five unpaid days off this year and another seven in 2012 as part of the yearly budget City Council approved at the end of May.

City staffers won't see any raises and will have to contribute more toward their pensions as part of the 2011-12 fiscal year budget, which the city posted recently on its website.

As the city continues its slow recovery from a recession, it will have to cut service levels in several departments and keep up its efforts to bring new businesses into town and strengthen the local economy, the 222-page document notes.

"This remains the most challenging economic environment faced by the City since it was founded," the budget reads. "The local economy continues to experience the negative impacts of a long and deep recession."

Employees will pay 2 percent of their earnings toward retirement while the city will contribute 6 percent. The $81.9 million budget continues a pay and hiring freeze that's been in place for a couple years.

There's a $4 million gap in the budget, which the city will stopgap with some of its $27.1 million rainy day fund.

The 2011-12 budget is $3.7 million – that's 4 percent less than the current year's. Forty-five percent of it will go to the general fund, with the rest divided up between special districts, the Redevelopment Agency, public service and capital-improvement projects.

Property taxes are the city's biggest revenue source, making up more than 60 percent of the general fund. Property values declined 1.46 percent since the last adopted budget and aren't expected to increase in the near future, the city says. New homes built in the Dougherty Valley should offset some of that revenue loss, however.

Sales tax, the next-biggest revenue source for San Ramon, is expected to grow this coming year from its base of $7.5 million, the city says:

The length and depth of this recession has caused sales tax revenues to steadily decline by more than 20 percent from FY 2006-2007 levels.

It is difficult to have confidence in projections for an economically sensitive revenue source such as sales tax in the economic environment the City is facing.

The projection of $7.7 million for FY 2011-2012 is based on an inflationary increase of the existing base level of activity.

The expenditure budget for the general fund is $36.5 million – 3 percent less than in the 2010-11 budget. Increased CalPERS and health-care rates have forced the city to offset those costs with furlough days and a hiring freeze that has left 41 positions unstaffed since 2009.

San Ramon will set aside some $10.8 million in a trust fund for retiree health care. The city also has an obligation to pay $100,000 this coming fiscal year toward the Dublin Regional Fire Authority's retiree health care, according to the city.

An additional $12.9 million of the city budget is allocated for the Dougherty Valley Fund, which pays for city services like policing and maintenance for neighborhoods in the Dougherty Valley. The Dougherty Valley Fund will pay for street lights, parks and sidewalks this coming fiscal year.

To read the entire budget, click on the pdf attached to this article.