Redwood City City Council to Consider Revised Fiscal Year 2020–21 Budget October 26, 2020
City operating revenues expected to drop by $13.1 million this year with economic recovery due to COVID-19 not expected for years, driving need for Revised Budget
On Monday, October 26, 2020 the Redwood City City Council will consider the Revised Fiscal Year 2020–21 Budget. Due to the economic impacts of the COVID-19 pandemic, City revenues are expected to drop 8.1% or $13.1 million compared to Fiscal Year 2019–20 and the City expects that it will take at least five years for revenue to return to the Fiscal Year 2019–20 levels. As a result, the Revised Budget proposes to reduce expenditures by $7.7 million from the Fiscal Year 2020–21 Adopted Budget. When reduced revenues are combined with known increases for retirement benefits for retired and current employees, the City must take action to reduce operating costs and seek new revenues. Without action, the City faces annual deficits of $7–13 million per year for the foreseeable future.
The Revised Budget continues the City’s longstanding practices to support the City’s financial health, while striving to address critical needs in light of the COVID-19 pandemic, to advance multi-year City Council priorities, and to focus on equity and sustainability.
Budget in a Nutshell
The Revised Budget advances the City Council’s three top priorities: housing, transportation, and children and youth. The Revised Budget is also informed by longstanding concerns which have special urgency at this time: racial equity and climate change. Following extensive engagement and study over the last several months, three new actions are recommended. The Revised Budget funds City participation in a pilot program to pair mental health professionals with officers responding to crisis calls. Additionally, the Ad Hoc Committee on Policing will recommend creation of a new Police Advisory Committee, which does not require additional funding. Finally, the Revised Budget commits new staff and operating resources to developing an Equity Workplan and examining diversity, equity and inclusion in our organization and our policy decisions, in alignment with the City Council’s decision to add equity as a Foundational Guiding Principle in the City’s Strategic Plan.
Looking into the financial future (unfortunately, without a crystal ball)
In light of the unforeseen and extensive impacts of COVID-19, in June, the City Council approved a budget that “rolled over” from the last fiscal year, and asked that staff return to the City Council in October 2020 to adjust expenditures when the revenue picture was clearer. This approach was possible due to the City Council’s history of taking intentional, proactive and strategic steps to ensure the long-term fiscal sustainability of the City.
While long-term forecasts remain muddied by a chaotic year, we now have a clearer perspective to revise our budget for the remainder of the current fiscal year and to refine our strategic direction for the next few years.
In the last two years the City has developed 10 year forecasts, which are particularly helpful for identifying the impact of trends over time. This longer view is important in times of crisis, allowing the City to plan thoughtfully and avoid abrupt service impacts to the community. With the Revised Budget, we continue to fund ongoing services from ongoing revenue, and use one-time revenues for one-time expenses. City operating revenues are expected to drop 8.1% or $13.1 million compared to FY 2019–20 and we expect it will take at least five years for revenue to return to FY 2019–20 levels. When combined with increased costs of retirement benefits for retired and current employees (see CalPERS pension and retiree health liabilities section), the City must take action to reduce operating costs and seek new revenues.
The Revised Budget uses ongoing core operating revenues for ongoing core operating expenditures and is structurally balanced for City operations after making reductions in each department. It also taps into $3 million in one-time funds or reserves to fund critical community needs and City Council priorities.
Where are the proposed reductions coming from?
Reductions occur in all departments, and include $4.9 million reductions in funding for public safety services (5–6% of Fire and Police Department expenditures).
In the Fire Department, the savings would be achieved primarily through holding nine firefighter vacancies and leaving a Fire Training Captain position vacant. At this time, this would result in a temporary brownout of Engine 9 and a shift of the bulk of its calls to Truck 9.
In the Police Department, we would achieve these savings by refraining to fill nine vacant Police Officer positions.
The proposed reductions in the Revised Budget are not sustainable if the same service models continue. As the City conducts further analysis and works with employees, the specific reductions required for the long term could be different from those recommended at this time.
The Revised Budget should be thought of as a transitional budget while staff analyze current services and assess opportunities to reduce costs and modify service delivery approaches. We have work to do, which will involve employees, to consider new models.
The Three R’s: Respond, Restore and Reimagine
The City Council-endorsed financial and community recovery strategy to help our community and organization meet the health, economic and social challenges presented by the COVID-19 pandemic is nicknamed the Three R’s:
1) Respond to immediate community needs resulting from the Covid-19 pandemic, with particular care for vulnerable populations;
2) Restore community cultural, economic and social vitality in partnership with community organizations and businesses; and
3) Reimagine public services in light of evolving community needs and limited financial resources.
The Revised Budget provides funding for responding to immediate community needs and restoring community vitality. Many activities to advance these goals are underway, marking the beginning of multi-year work to reimagine City services to ensure the City’s financial sustainability while meeting community needs. The Revised Budget relies upon holding open vacancies and reducing expenditures throughout the City organization while selectively investing in new approaches. This allows the City to match ongoing revenues and expenditures, and to enable new service models to emerge.
The work to reimagine City services has begun. It cannot be rushed; it requires analysis, communication and careful consideration to ensure new models provide the best possible service while avoiding unforeseen consequences
With Challenge, Comes Opportunity
New approaches to community engagement and the transition to remote work are another facet of reimaging City services. These efforts could enhance our ability to connect with residents, provide more convenient services, and reduce commuting strain on our employees long after the pandemic ends.
In addition to continuing to respond to immediate community needs due to COVID-19, it will be a busy year with some important initiatives planned.
The Revised Budget includes $200,000 for a pilot program pairing mental health clinicians with police officers, $200,000 for equity initiatives, $450,000 for coordination and process improvement in Community Development and Transportation, and $500,000 for climate adaptation initiatives
Pilot Program Pairing Mental Health Clinicians with Police Officers ($200,000)
Since June, the City Council Ad Hoc Committee on Policing and City staff have been busy listening, learning and leaning in on ways to advance racial equity, including reviewing policies and researching best practices relating to municipal policing.
One of the key recommendations from the community regarding these issues has been to explore alternatives to police officers responding to mental health crisis calls by considering the deployment of mental health clinicians in partnership with police officers or instead of police officers when possible.
The Revised Budget includes funding for a Pilot Program in partnership with San Mateo County and other cities, which would launch in the first quarter of 2021. We are excited by the potential of this program and the feedback we have received from residents will help us refine our service delivery model. The plans for this program are fluid and we anticipate ongoing assessments and modifications throughout the two-year pilot. The agencies intend to partner with the John Gardner Center for Youth and the Families at Stanford University to establish research measures and report on program effectiveness.
Equity in Redwood City ($200,000)
The City has a long standing history of supporting diversity, equity and inclusion; yet, we are mindful that we can do better. The Revised Budget incorporates recommendations from the City Council Ad Hoc Committee on Policing, including the development of an Equity Workplan. The Workplan will help the City apply an equity lens to City policy decisions and to support diversity, equity and inclusion initiatives for employees and for volunteer leadership such as board, commission and committee members. It also includes funding a new position of Equity and Empowerment Officer to lead the development of the Equity Workplan.
Climate Adaptation Initiatives ($500,000)
We are working to reduce Redwood City’s carbon footprint — as an organization and as a community. Along with greenhouse gas mitigation strategies, we have implemented adaption strategies, including partnering with community groups to increase citywide tree planning, and increasing planting along the shore to minimize erosion and sequester emissions. We also have several initiatives underway to address sea-level rise in collaboration with the San Mateo County Flood & Sea Level Rise Resiliency District
The City Council’s Environmental Initiatives Committee received considerable feedback from environmental groups on the draft 2030 Climate Action Plan this summer, and it is expected the draft Plan will come before the City Council in November for consideration, in addition to a Green Purchasing Policy. An interdepartmental Climate Adaptation Team is being formed to develop recommendations for modifying City operations, facilities and programs in light of changing climate conditions.
Communication, Coordination and Process Improvement in Community, Development and Transportation ($450,000)
The Community, Development and Transportation Department is undertaking an assessment of its Building Inspection and Code Enforcement Division organizational structure and staff functions to identify the most efficient manner to deliver services to meet the Department’s and community’s current and future needs.
In addition, on October 12, the City Council approved initiating General Plan Amendments for three housing projects: 1205–1295 Veterans Boulevard; 615 El Camino Real (American Legion); and 505 East Bayshore Road, and for three commercial/mixed-use projects: 2300 Broadway (Chase Bank site); 603 Jefferson and 750 Bradford (Redwood City School District site); and 901, 947, 999 El Camino Real and 2529 Broadway (Autozone). The City Council also directed that commercial/mixed-use projects at 601 Allerton and 1900 Broadway (Wells Fargo site) return to Council for review in the next six months. Ongoing long-range planning initiatives include the Transit District/Sequoia Station project, Housing Element Update, Central Redwood City Plan, and Residential Design Guidelines.
It’s going to be a heavy lift for the department and the recommended funding will enable implementation of recommended efficiencies, and support the considerable workload associated with development processing and long-range planning.
City Council Equity and Social Justice Sub-Committee and a Police Advisory Committee
After taking in community feedback on policing and equity issues, the City Council Ad Hoc Committee on Policing has continued to meet to discuss how the City Council and community members can continue to be involved in these issues. The Ad Hoc Committee will be recommending the formation of a City Council Equity and Social Justice Sub-Committee, and a Police Advisory Committee. The City Council Committee would be appointed by the Mayor and the Police Chief Advisory Committee would be appointed by the Council. Final details are now in development. Conceptually, the Police Advisory Committee could provide input on policing policies and activities, and feedback on the mental health program currently being created with the County of San Mateo and Cities of Daly City, San Mateo, and South San Francisco. Police Advisory Committee members would be selected with an eye toward broad community representation and provide advice to the Police Chief and report to the City Council. The City Council Equity and Social Justice Sub-Committee would review these efforts over time, and would consider opportunities for a City Commission on Equity as the Equity Workplan is developed. The Ad Hoc Committee on Policing will discuss these recommendations on October 26, and ask the City Council approval at a future meeting.
Join the Conversation
Please join us on Monday, October 26, 2020 at 7:00 p.m. via Zoom.
To maximize time for live public comment, we encourage members of the public to provide comments by joining the City Council meeting via Zoom: For web, visit redwoodcity.zoom.us, select “Join” and enter Meeting ID 999 2068 0907. Use the Raise Hand feature to request to speak. You may rename your profile if you wish to remain anonymous. For dial-in comments, call *67 (669) 900–6833 (your phone number will appear on the live broadcast if *67 is not dialed prior to the phone number), enter Meeting 999 2068 0907 and press *9 to request to speak. All public comments are subject to a 3-minute time limit unless otherwise determined by the Mayor.
If you wish to submit written public comment, please send an email to the City Council at council@redwoodcity.org. Please indicate the corresponding agenda item # in the subject line of your email. Any public comment regarding agenda items that are received from the publication of the agenda through the meeting date will be made part of the meeting record, but will not be read during the Council meeting.
The full staff report can be viewed here (Agenda Item 8.A).
The proposed Revised Fiscal Year 2020–21 Budget can be found here.
