ALAMEDA -- The City Council has adopted a two-year budget cycle for the city, a move that officials say will promote better long-term planning, especially as they wrestle to find ways to pay for deferred maintenance and other ongoing expenses.

The advantages of the change from a one-year cycle also includes the time saved by simply not having to produce a budget annually, according to Fred Marsh, the city's controller.

Councilman Doug deHaan still wanted to make sure, however, that the council would receive regular budget updates so that it would not be blindsided if a city department was facing a shortfall by not taking into account the cycle's length.

But departing Assistant City Manager Lisa Goldman said the change makes that unlikely.

"Everybody's going to have to exert a lot of fiscal discipline," said Goldman, who is leaving her Alameda job later this month to become city manager of Burlingame. "The pot of money you get at the beginning of that two years is the pot of money you have to spend for two years. You are not going to get a reprieve where you can reset the clock."

The new cycle, which City Manager John Russo urged the council to support, allows city departments to roll over 50 percent of any unused funds in their budgets at the end of the second fiscal year for once-off capital improvements. But the council still has the option of amending a budget in the event of an emergency or natural disaster, significant changes in state or federal funding that were unknown when the budget was adopted, or there is at least a 3 percent decline in net revenue for the city's major funds.


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The longer cycle will likely make department leaders more fiscally conservative since they will have to plan further ahead, Russo said. It will also boost employee morale, Marsh said, because they will know their department has received long-term funding.

"I think having a two-year budget helps management, but also more importantly, it may help refocus the council -- and the new council -- on seeing the forest more than the trees," Councilwoman Lena Tam said before the council backed the change unanimously on Tuesday.

Under the new cycle, which will kick in next year, the council will receive a status report, or a "mid-cycle review," each fiscal year. The council currently adopts a budget each year with a second-year forecast.

Among the financial challenges faced by the city include paying for deferred maintenance, which now stands at about $9.5 million annually, and the growing cost for retiree medical benefits, expected to reach $150 million in the next 15 years.

Of the 91 cities in the nine Bay Area counties, 67 percent work with an annual budget cycle. Some 21 percent use an annual budget with a second-year forecast and 12 percent use two-year budgets.

Soccer club lease

In other business Tuesday, the council approved a three-year lease with the Alameda Soccer Club for the use of the Alameda Point soccer fields at Lexington and Redline avenues.

The club must manage the schedule for the fields and will be responsible for mowing, fertilizing and other maintenance in lieu of rent under the lease.

Russo said the agreement, which reflects the previous lease with the Piedmont Soccer Club, will promote coordination among local youth soccer leagues.

The Alameda Soccer Club is part of the Jack London Youth Soccer Sport League, which also includes the Piedmont club.

Reach Peter Hegarty at 510-748-1654 or follow him on Twitter.com/Peter_Hegarty.

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