City of Fresno Facing $26.9 Million Shortfall For Fiscal Year 2011 General Fund Budget

With the City of Fresno facing a potential $26.9 million shortfall for its fiscal year 2011 budget, City officials today presented City Council with an overview of potential cost-saving measures that are being considered to help close the gap.

In a general fund budget update presented to City Council, Budget Director Renena Smith said the City continues to experience declines in revenue as well as increases in expenses. As a result, the City now expects to have $209.5 million available in the General Fund in fiscal year 2011. A fully-funded budget at current operations would be $236.4 million.

The City already has identified about $8 million in citywide operational revenue and expense adjustments and also is addressing the budget gap through department-specific reductions.

In addition, Mayor Ashley Swearengin’s administration has presented Council with white papers on four potential cost-saving measures that are being investigated for the fiscal year 2011 budget:

• An Employee Retirement Incentive program, which would provide cash incentives to encourage eligible employees to retire on or before a date certain. The goal of the program is to minimize layoffs and subsequent unemployment insurance increases that occur when employees are laid off.
• Franchising the City’s commercial solid waste collection services to private service providers. Under the proposal, the City would no longer offer solid waste services for businesses but instead would franchise the operations to private venders. The money collected from the fee would then be available to the general fund.
• Outsourcing and/or partnering with other stakeholders for park and median island maintenance activities. The goal of the effort is to determine if the quality and cost of these services can be improved by contracting with local landscaping companies to maintain parks, median islands, and other green spaces located within designated landscape areas.
• Developing partnerships with community-based organizations for operation of the City’s community centers.

In a memo to Council members, Interim City Manager Bruce Rudd said, “Some of the options being researched, while not new, will represent a substantial change in our current operations. The decision to pursue many of these alternatives does not come lightly. However, given the dire nature of the economic situation facing the City now and the foreseeable future, it would be irresponsible of the City, as stewards of the public’s money, to ignore these potentially viable cost-saving measures.”

Rudd’s Memo and more detailed white papers on the cost-savings options are attached.

Also attached are the budget presentation and memo to council.