AUG 2012 – City News by Council Member Bob Gardner

How Can We Best Assess Redlands’ Fiscal Health?

There are many factors to consider in assessing the fiscal health of a municipality such asRedlands, but the three most important all start with “R”: Reduced spending, Revenues, and Reserves.

The city started cutting back on spending several years ago.  To date almost 20 percent of the workforce has been eliminated.  For example, the police force has been reduced from 98 officers to 76 currently.   These reductions have not been without impact, but staff have worked hard to use technology and improved business processes to make up for the decreased resources.    Major costs for capital infrastructure projects such as street repair, and replacement vehicles have been deferred.   The overall goal has been to live within our means as much as possible.  This approach must continue as long as resources are tight.

Careful revenue projections are another important consideration.   As the economy improves, it can be tempting to project overly optimistic increased sales or property tax yields based on recent quarter or annual payments. Redlands leaders and staff have resisted this temptation, relying on a conservative approach, meaning the only surprises that occur will be positive, not negative changes.   Fee revenue also must be carefully estimated, and not counted until it is clear it will occur.   Prudent revenue projections are one definite strategy that has helped Redlands maintain better fiscal health.

Finally, building and protecting adequate reserves is critical to good financial management.   Several years ago the reserves had shrunk to very low levels.  Through disciplined and tough management, current reserves have increased to over $12 million, or 20 percent of the city’s proposed $60 million 2012-2013 General Fund budget.   These are “rainy day” funds that will not be touched unless there is truly a disaster or some other significant event justifying their use.   I hope to increase our reserves to 25 percent of the General Fund in the next few years.

Of course, this is not to say all this goes without some impact to city residents and businesses.   We are still well behind in investing in our infrastructure, namely our many streets, sidewalks, curbs, trees, and lights.   Many of our vehicles are well past their useful lives.   We are putting together some plans this fall to begin to focus in these areas, and will be sharing those plans later.   We are also working with our labor partners to agree on new contracts that will reflect current fiscal realities yet maintain our abilities to recruit and provide a competent and effective workforce.    

It’s a constant balancing act between living within our means, yet also looking to the future and investing to build Redlands even better than it is today.   I look forward to working with the Chamber as we face this challenge.

 

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