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Community Update from Mayor Jeff Ira: Budget Problems Prompt Need for Structural Change

I’m sure the entire community is aware of Redwood City’s serious budget difficulties. Skyrocketing pension and benefit costs; steady increases in operating expenses; flat revenues; a stagnant economy; and the necessity for significant reductions in expenditures. One result is a Redwood City organization with far fewer staff than we had ten years ago. Even while working to generate new revenues and improve efficiencies, we have to address the underlying structural problems with our budget to ensure we’re creating a sustainable fiscal foundation.

A big part of the solution is permanently reducing costs. Using “smoke and mirrors” (think: California) won’t provide long-term financial stability. Temporary fixes are just that – temporary. Using one-time funds, such as reserves or gifts, only delays the need for real fiscal reform.

If we were to use reserves to balance our budget, at the end of three years those funds would be exhausted and we’d still be facing a deficit in the following years. We’ve utilized reserves in the past – under specific circumstances to endure temporary revenue losses, to buy time as the financial tide turned. But today’s situation is different. The “new normal” of the fiscal environment requires significant, permanent structural change in our expenditures.

In the same manner, using bequeaths or other one-time funds for ongoing operations merely postpones the inevitable. Once those funds are gone, they’re gone – but our day to day services must continue.

Such use of reserves or one-time funds doesn’t provide for a solid, sustainable financial structure. It creates a short-term dependence that will unquestionably be followed by a collapse when the dollars run out and we’re left with providing services we can’t continue to fund. That path is simply not sustainable. A permanent reduction in expenditures is the only viable way to lay the foundation for a more prosperous future.

In fact, the use of reserves to support long-term ongoing operations is the kind of fiscal course that could lead to bankruptcy in cities like ours. It’s far more prudent to make the tough decisions now, in order to build for tomorrow. Every Redwood City department, at all levels, is making difficult choices right now. There are no easy answers, but in the long run it’s precisely those tough decisions that will lead toward fiscal stability.

I’m proud and gratified that the Police Officers Association, Police Sergeants Association, and Executive Management Team have made those tough decisions and come to agreements on concessions that will help our long-term finances. They are leading the way, and are good examples of the City moving in the right direction.

These difficult times illustrate the value of giving back to the community. This is the time to work together, get involved, find a passion and interest in the community, and take action: volunteer with a non-profit, help out with a league sports activity, help our Library, or a school, or service club – there are many volunteer opportunities online at www.redwoodcity.org/calendar (sort by “Volunteering”) and at www.redwoodcity.org/opportunities.

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