San Carlos Approves New City Budget

The city council approved the more than $55 million proposed 2011-2012 budget last night, despite some hesitance from mayor Andy Klein about the council's recent spending decisions and the slow decrease of the city's newfound surplus.

The budget was passed with a 4-1 vote. Klein was the no vote.

Klein said the city has reimplemented several programs it had previously cut which was cutting into its surplus and he feared the future would show only more spending.

The more than $55 million proposed budget includes $11,886,350 for the city’s redevelopment agency, and takes into account the $510,000 the city will spend on one-time costs for dissolving the Belmont-San Carlos fire department.

“It is a one-year budget and as proposed reflects an operating surplus of approximately $394,600,” city documents said.

That money will be split, with half going to the city’s Capital Improvement Fund 25. That is a fund used for city infrastructure including technology, capital improvements, street resurfacing, system upgrades and storm pump, said administrative services director Rebecca Mendenhall.

The other half of the surplus will be placed in a reserve fund known as the Economic Uncertainty Fund.

“It is anticipated that there will be future liabilities related to the dissolution of the Belmont-San Carlos Fire Department,” city records said. “As these costs have not yet been finalized, they have not been included in the budget.”

Mendenhall said she anticipated the unfunded liabilities to be around $800,000 to $1 million.

Staff broke down the various reductions and additions to the city. The budget reflects reductions in park maintenance, human resources recruiting, public notices and Recreation Activity Guide expenses. It also includes the elimination of the youth basketball contract, the IT Systems Analyst and Payroll and Benefits Technician and the dissolution of the Belmont-San Carlos JPA.

Additions to the budget include the funding of part-time staff to maintain the homework lab at the Youth Center, a part-time staff to maintain the Youth and Adult Center wellness programs, the restoration of code enforcement through shared services, more funding for the Night of Holiday Lights, an increase in operating expense for records retention program, additional funding for Sheriff’s contract for part-time traffic enforcement and additional funding for on-call GIS services.

The city also restored the Jobs for Youth program and gave additional funding for television recordings to include taping of the Planning Commission meetings and other broadcasts. The new contract with Half Moon Bay to provide Recreation Services was also named as an additional service.

City Manager Offers "Two Paths" to Close $3.5 Million Budget Gap

San Carlos City Manager Mark Weiss unveiled his Proposed 2010-11 City Budget today in preparation for City Council Budget Workshops scheduled in March. Copies of the proposed budget staff report are available for review at City Hall and on the City's Web Site.

The budget workshop, to be held on Saturday, March 13th at noon in the Community Rooms of the San Carlos Library, 2nd Floor, 610 Elm Street, will enable the City Council and community to hear a detailed budget presentation, offer public comments and hear City Council thoughts on the proposed budget.

The City Staff has also reserved the Community Rooms at the San Carlos Library for March 22nd starting at 6:00 pm in the likely event that the Council Budget Workshop is continued. Input from the workshop will be used to prepare the 2010-11 Budget to be presented to the City Council for review and approval in early May.

The City’s Proposed Budget for 2010-11 features "two paths" to a balanced budget. The recommended path involves City Council authorization for the City Manager and City Department Heads to prepare service agreements for receiving Police and Fire services from neighboring agencies and to explore contracting for parks maintenance services.

This option is projected to save the City approximately $5 Million or more per year and would cover the City’s budget deficit without necessitating additional cuts to City services. A second path features a series of major service changes in many City service areas. This option will save the City $3.5 Million per year and would close the City’s budget gap for 2010-11. Some of the key service reductions that would occur with the second option include:

• Cutting 9 Full-Time positions including 2 Additional Police positions plus numerous Part-Time support personnel
• Closing the Youth Center and Eliminating Administrative Support for Special Events in San Carlos (including Hometown Days, Art & Wine Festival and Summer Concerts at Burton Park)
• Reducing City Counter Service Hours to 3 Hours Per Day and Closing the City Clerk’s Counter with Service Provided by Appointment Only
• Freezing the City of San Carlos Contribution to the Funding of the Belmont-San Carlos Fire Department at the 2009-10 Budget level
• Discontinuing Funds to Record and Broadcast City Council Meetings on Cable TV and the Internet

City Manager Mark Weiss said “Two years ago I indicated that the City of San Carlos was at a “Tipping Point” and asked the City Council to declare a fiscal emergency. Last year a local one-half cent sales tax designed to preserve City services (Measure U), was placed on the November ballot and was rejected by San Carlos voters. Thus, the major steps proposed in this budget to bring it into balance will not be surprising to those who have been following the local, state and national economy and the City’s fiscal status.”

Weiss added that “This is the 11th year in a row that the City of San Carlos will be making program and service cuts in the annual budget. Even though there were two rounds of budget cuts last year, the City’s General Fund Budget deficit has grown by almost $1 Million (from $2.6 Million last year to $3.5 Million this year) even after all of these cuts were implemented. This confirms the projections made last year that the current approach of making modest budget cuts each year and tapping into reserves is no longer sustainable.”

“What I am proposing in this year’s budget is a paradigm shift in how we view City services in San Carlos. Rather than continue to attempt to provide the full range of City services mostly in-house, I believe it is time to accelerate the use of contract services in several areas in an effort to improve efficiency and take advantage of economies of scale, while embracing a regional service delivery model.”

“With the help of the City Department Heads, we have developed a menu of options for the City Council to consider in the upcoming budget to fully close the $3.5 Million per year budget gap. The recommended path involves contracting out or outsourcing Police and Fire Department services in a more sustainable manner. Additionally, choosing this option would allow the City to preserve all services, including public safety, facilities and community events at their current, albeit already reduced levels. This approach addresses the budget deficit in an aggressive manner and avoids closure of facilities and continued deterioration of all City services.”

“This budget includes tough choices and offers a different view of the City’s future as we move forward. I envision a vigorous discussion as the Council explores and decides the road San Carlos will follow into the future. I invite San Carlos residents to attend and participate in this vital process.”

City Council - 2010-11 Budget Study Session - March 13th at Noon

The City Council will hold their annual budget study session on Saturday, March 13, 2010 from Noon to 5:00 pm. in the Community Room, 2nd Floor, San Carlos Library, 610 Elm Street.

This meeting will include a presentation by the City Manager and City Department Heads on the proposed 2010-11 City Budget. The meeting will also provide time for City Council questions and discussion on the proposed budget.

It is also anticipated that there will be time for public comments on the proposed budget. Individuals who are unable to attend this meeting will be able to comment on the proposed budget at the second budget study session to be held on the evening of March 22nd starting at 6:00 pm.