Foster City: A Vibrant Community, Then, Now and Forever

Budget issues are never easy to tackle. We continue to see that any rebound of the economy will be slow but we are fortunate that this city prepared well for such downturns with having the necessary reserves to carry us through. The council has been working very hard with staff over the past 10 months to find ways to attack our structural deficit and do so with a variety of options. Of course it is inevitable that someone or some group will not feel that the process was fair or that everything was adequately considered. With emotions running high at times during the process, decision makers remain focused and committed to a reasonable and successful outcome. I have approached this budget process carefully and with balance in mind; that is to say, I concur with the need to make some cuts in expenditures, but I also see the need to evaluate other avenues through which we can reasonably provide some of those services and activities that find themselves the first targeted for elimination. In my mind fiscal responsibility carries with it the requirement to see the broad picture; to make sure that essential services are provided to our residents but also to make sure that we do everything possible to continue to find ways to sustain a vibrant community where quality of life amenities are what draws people to live, work and recreate. No doubt we have been able to sit down with staff and find ways to cut expenditures and streamline the way we do business but I feel it is also our responsibility to look at additional revenue sources, and work on negotiating employee contracts going forward to keep this process balanced.

How members of the council approach the budget issues are at times very different. We don’t always agree, however, we must not forget that differences of opinion regarding how to get to a successful result of a plan, is not irresponsible. In fact, differing thoughts and methods can at times yield new opportunities that were not considered.

In the beginning of this process we identified the various components or tools available for us to use in order to clear the deficit. Because of the level of reserves we accumulated over the years, Foster City was very well prepared for the “rainy days” of economic uncertainties that unfortunately have lasted longer than anticipated. This reserve account allows us the time to evaluate what is needed to eliminate the structural deficit with minimal impact to our residents. As I said at our last study session, the council has spent many hours over many months evaluating information provided by staff in order to structure the final budget document that will effectuate the solution to the problem facing the city. In the beginning we used the analogy of “turning dials” on a variety of components that will get us to our goal. Those components were identified as: expenditure reductions, some personnel reductions, review employee salaries and pensions, and look at revenue enhancements. By approaching the problem with the idea of turning each of the dials as equally as possible, we can effectively and smoothly attack the deficit with minimal impact to residents.

In my opinion, Foster City is in good shape and between the council directions to the city manager and subsequent staff recommendations, the changes made to date have made a significant “down payment” towards eliminating a $4.8 million deficit. Thus far we have chipped away $2 million for fiscal year 2011-12. We will also start the new fiscal year with $2 million more in reserves than expected.

We still have work to do, however, and business as usual is not acceptable going forward. There will have to be some changes made and many of those changes have been identified for the coming years. The vision for maintaining the quality of life amenities in our community will take the effort of turning all those dials and we have not done that as yet. The focus has been on making cuts. New revenue sources will play an important role in attacking the deficit. Several projects are coming up in the near future such as the development of Pilgrim/Triton, which has already begun and the eventual development of the 15 acres, and the expansion of the Gilead Sciences campus to name a few. There is a proposed increase in the Transient Occupancy Tax (hotel tax) which will be on the November ballot and could bring in at least $300,000 to the city yearly if passed by the voters. The other component, still needed to reach our goal, is the employee salaries and pensions contracts. We are now negotiating with Police & Fire contracts which expire in June. I believe to effectively attack the structural deficit, and still maintain the high quality of life for the residential and business communities, we must keep our approach well balanced. We can’t get there with merely cutting away at the fabric of what makes this a community.

I was disappointed when one of my colleagues stated that it won’t be much fun living in Foster City because of the cuts being proposed. I believe that if we take a more balanced approach towards eliminating the structural deficit, Foster City will continue to be a fun and enjoyable place in which to live. I am pleased at the way the city staff has rolled up their sleeves and worked with the council sharing ideas and suggestions to cooperatively work towards our balanced budget goal without using reserves.

Although we still face a challenging fiscal environment, due in part to the state’s budget crisis, we are fortunate to have the time to examine the various options we have at hand to attack and eliminate our structural budget deficit. It truly is a difficult process but we will get through with successful results. Please contact me about this and other issues at lkoelling@fostercity.org.