Mayor Swearengin: City of Fresno Facing $12 Million Shortfall in FY 2011 Budget

Citing the “unrelenting nature of this economic recession,” Mayor Ashley Swearengin today said the City of Fresno faces a $12 million shortfall in the fiscal year 2011 budget.

Mayor Swearengin said she will present a mid-year budget-balancing plan to City Council on Oct. 21. Council review, deliberation and final decisions are expected by late November 2010, with implementation of the plan scheduled for Jan. 1, 2011.

“Like most other California cities, Fresno continues to face incredibly daunting challenges in balancing our budget,” Mayor Swearengin said. “We anticipated another round of mid-year cuts this year, but the weak economy has put us in a position where the cuts will be more significant than we expected. I’m cautiously optimistic that these will be the final round of cuts that we have to do.”

Mayor Swearengin said several factors have contributed to the $12 million shortfall, including:

  • The actual carryover from the fiscal year 2010 budget was $166,000, $1 million less than projected.
  • Property tax is expected to be $2 million less than anticipated when the FY 2011 was adopted and sales tax is projected to be $1.5 million less.
  • The general fund will pay $2.5 million in debt service for the Convention Center parking garage and apply $100,000 toward deficit fund recovery.
  • Concessions worth $3 million that were assumed in the budget adopted by Council in June were not realized.
  • An anticipated increase in future expenses requires $1.9 million in reductions now to maintain fiscal stability in the future.

In preparing the mid-year reduction plan, Mayor Swearengin said key assumptions will include commercial solid waste franchise revenue, labor concessions, no increase in salaries for City employees beyond current agreements, and increases in development fees.

Other budget- balancing strategies will include evaluation of department consolidation; management cuts; ongoing operational cuts to general fund departments; and cuts to the Mayor, City Manager and Council offices.

Today's announcement included an FY2010 Year End Budget Report and this FY2011 Budget Update