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CITY MANAGER's budget update

6/23/10

July 1, 2010 marks the midway point for the City’s two year budget that was approved last year for the 2009/2010 and 2010/2011 fiscal years.  Even though the City is on a two year budget cycle we evaluate and adjust the budget at the midway point to account for changes in revenues and expenditures.    On June 15, the City Council considered and approved a budget amendment, or midway adjustment, for the 2010/2011 fiscal year.  The highlights of the budget amendment are listed below.  If you would like more information, visit our Finance Department webpage to see the entire budget document.

Anticipated actual revenue and expenditures for the 2009/2010 fiscal year

  • $681,271 less revenue, mostly attributed to sale tax declines
  • $1.7 million cut in operating expenditures as a result of lower staffing levels, contracting out landscape services, and employee concessions
  • $2.4 million deficit for the year

Amended 2010/2011 budget

  • Prior to amendment the budget deficit for this fiscal year was $5.5 million
  • Amended budget calls for a balanced budget due to a slight projected increase in revenues and a $3.3 million decrease in expenditures, which builds on the measures taken in the 2009/2010 fiscal year

While the balanced budget for the 2010/2011 fiscal year has given the City a sigh of relief, the reprieve is going to be short lived.  The $3.3 million decrease in expenditures creates even more challenges for delivering services and the continued state budget crisis and the fragile economy adds uncertainty to our revenue stability.  Furthermore, the increasing costs of providing important services to our residents will continue to challenge the City for years to come.   

As a reminder, one of the ways you can continue to help us meet the challenges ahead is to Shop in Fountain Valley.  Remember that when you make your purchases at home in Fountain Valley a portion of the sales tax goes to supporting important services the City provides. 

Sincerely,

Raymond H. Kromer
City Manager