CONCORD -- When city leaders placed a sales tax hike on the ballot four years ago, they had no idea how critical those additional dollars would turn out to be.
Approved by voters in 2010, Measure Q -- a half-cent sales tax increase -- has proved to be a "lifeline" as Concord has struggled to bounce back from the depths of the recession, City Manager Valerie Barone has said.
Although the city has eliminated services, reduced the workforce and cut employee benefits, those Measure Q dollars helped replenish reserves and preserve police functions, youth sports and recreation programs.
Guy Bjerke, mayor at the time and currently leading the Measure Q oversight committee, had believed five years was long enough for a tax increase.
"I was wrong in 2010," Bjerke told the council during a recent budget workshop. "We will need to extend this measure in order to ensure Concord's quality of life doesn't suffer over the next 10 years."
The proposed fiscal year 2014 budget projects total revenues of $85 million -- including about $29 million in regular sales tax, $11.6 million in Measure Q sales tax money and $20 million from property tax. Expenditures are projected to be $81.4 million, up $2.3 million from the current fiscal year, according to Jovan Grogan, budget officer. The proposed budget uses $8 million of the Measure Q tax dollars for operations and puts the remaining $3.6 million in reserves.
While the budget includes an additional $1.7 million for full-time salaries, it also reflects savings of $625,000 from changes to employee benefits and $528,000 from reducing part-time staff. The budget also funds eight new full-time positions, including three police dispatchers, a building inspection supervisor and a vehicle abatement officer.
The proposal also increases funding for a marketing campaign to lure jobs and businesses to Concord from $40,000 to $162,000.
Although the economy has been slow to recover in Concord, there are some positive signs. The unemployment rate is down to 7.6 percent from just over 11 percent two years ago, sales tax revenue is up, property values are rebounding and a handful of new businesses opened last year -- including Uniqlo (apparel), Lazy Dog Restaurant and Bar and Concord Mazda.
But with Measure Q set to expire in March 2016 and about $8 million more in revenue needed per year to fully fund retiree benefits and pay for a backlog of infrastructure projects, Concord's financial future is anything but rosy.
According to the 10-year financial forecast, the city will need to identify $4 million in ongoing cuts and use $16 million in reserves to balance budgets over that period. But that doesn't include an additional $5.9 million for roadway and street sign improvements, $1.2 million for building maintenance and $1.2 million for retiree medical benefits Concord should be spending each year. The forecast assumes annual average growth of 2 percent for property tax revenue and 3 percent for sales tax.
By fiscal year 2023, staff projects that the city's reserve fund will have dwindled to 14 percent of total expenditures -- enough to cover less than two months of Concord's operating expenses.
Barone said staff will present specifics on possible budget cuts at the June 3 budget workshop.
Councilman Edi Birsan said he doesn't consider the 2014-15 budget balanced because it relies so heavily on Measure Q funds. He encouraged his colleagues to get serious now about facing the city's financial challenges.
"What is it going to take in the next four years to get us to truly a balanced budget?" he asked. "It may be excessively painful."
Lisa P. White covers Concord and Pleasant Hill. Contact her at 925-943-8011. Follow her at Twitter.com/lisa_p_white.