Contact: Mayor Jim Ridenour  (209) 571-5597
No. 08-136
May 12, 2008

Mayor Announces Proposed Budget Message

Today, Modesto Mayor Jim Ridenour released his Fiscal Year (FY) 2008-09 Proposed Budget Message to the public. In February, Modesto voters approved amendments to the City Charter through Measures M and N. Measure M charges the Mayor with the development and delivery of a recommended budget. The FY 2008-09 budget process marks the first implementation of this change.

The Mayor has taken an active role in the development of the budget for FY 2008-09 with the goal of closing the gap between the city's expenditures and revenues, bringing them more in line with one another. This year, the Mayor's State of the City Address focused on the subject of "Keeping our Fiscal House in Order," the Mayor acknowledges that doing so requires discipline. In his message, the Mayor emphasizes that the Council must set priorities and that it is vital, when able to do so, to recover the cost of doing business. The Mayor focuses on the things that can and must be done to make progress in controlling spending while meeting the expectations of Modesto citizens in the delivery of vital services.

In FY 2007-08, the impact of the housing crisis hit hard. Just two years ago, in FY 2005-06, the City recognized over $29.6 million in sales tax revenue and projected steady increases of 4-5% in outgoing years. For this current fiscal year (2007-08), the City adopted a budget that estimated sales tax at $29.4 million. Over the year, that figure has been revised downward four times and the City is now estimating the fiscal year will end with slightly less than $27 million. The City will be monitoring sales tax revenues closely and will be ready to act accordingly to any changes in the revenue projection.

"This has not been an easy process," said Mayor Ridenour. "We've had to ask the hard questions about programs and services and have come to the realization that we cannot be all things to all people."

In his Proposed Budget Message, the Mayor is asking the City Council's consideration of over $13 million in combined revenue enhancements and expenditure reductions to bring the General Fund expenditures in line with proposed revenues. Of this total, there is approximately $3 million in new revenue and $10 million in reduced spending spread across all departments. The recommendation for expenditures results in the reduction to or elimination of key programs, such as:

• Reducing the Building Inspection program by a total of three Building Inspector positions in acknowledgement of the reduced activity in this area ($234,810);
• Reducing all travel and training accounts by 50% with exceptions on training needed to maintain professional standards and verifications ($500,000);
• Leaving 21 sworn positions in the Police Department vacant for the entire year - five positions less than what has been held vacant in FY 2007-08 (est. $1.8 million);
• Eliminating the neighborhood-based pool program and demolishing seven pools with corresponding staffing reductions ($256,037);
• Reducing the Tree Preservation program by two Tree Trimmer positions impacting service levels for tree preservation activities and cycle pruning ($112,752).

The FY 2008-09 Proposed Budget strives to minimize reductions in core service areas and focuses on key fiscal priorities: public safety, programs for the less fortunate, clean drinking water, safe waste disposal, preservation of developed assets like the parks system and maintaining economic competitiveness. It is important to note that this proposed budget does not reflect any potential impacts from the State as they struggle with a $20 billion deficit.

Out of a need to avoid crippling vital public services, the Mayor is recommending a reduction in the General Fund reserve level from 8% to 7% for FY 2008-09, but notes that this should be a one-time action that will be re-evaluated on an annual basis.

Additionally, the Mayor is asking Council to adopt the following budget goals for FY 2008-09:

• Focus resources on vital public services
• Begin efforts which will result in long-term structural budget changes
• Reduce deferred maintenance
• Increase the City's economic opportunities.

As part of his new budget responsibilities under Measure M, the Mayor is also seeking Council adoption of 11 Budget Principles that pave the way for future budgets.

The Mayor encourages all citizens to stay informed about the budget process and to participate in the Annual Finance Committee Budget Workshops beginning May 19. The workshops will be held in Council Chambers located in the basement of Tenth Street Place, 1010 Tenth Street. The schedule for the budget workshops is as follows:

• Monday, May 19 (4 p.m.)
       Transportation-related funds review and capital improvement program
• Tuesday, May 20 (9 a.m.-noon)
       General Fund review
• Wednesday, May 21 (9 a.m.-3 p.m.)
       General Fund review
• Thursday, May 22 (1-4 p.m.)
       Utility Funds review

The Finance Committee Budget Workshops will be televised live on AccessModesto on Comcast Cable (channel 7) and Charter Communications (channel 19); they will also be streamed live on the City's website and can be accessed by visiting www.modestogov.com and then by clicking on Council Webcast; the workshops will also be archived on the website. The workshops will be recorded and burned onto DVDs for those who are interested but are not able to attend the workshops in person or watch them live on television or the website; the DVDs will be available approximately two weeks after the last workshop and can be purchased for $15 on the second floor of Tenth Street Place.

To review the Mayor's FY 2008-09 Proposed Budget Message in its entirety, visit www.modestogov.com.

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To contact the City of Modesto Public Information Office, 
call Jessica Smart at (209) 571-5125. Email: jsmart@modestogov.com