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As the city council members set their goals and priorities for 2023, Redwood City officials continue to explore ways to confront structural deficits in the city’s budget projected to occur over the next eight to 10 years.
Housing, transportation, children and youth engagement are some of the biggest concerns in Redwood City and what officials believe the city should focus on in 2023.
But if the city does not make “very substantial changes in services,” the city could lose about $10 million a year for the next several years, City Manager Melissa Stevenson Diaz told council members on Saturday at a special meeting.
“That's substantial out of an operating budget of $165 million,” Stevenson Diaz said. "That's about the size of our library budget. It's about the size of 23 firefighters or similar number of police officers.”
Although the city has cut back on services and has used $9.1 million in reserves, officials are anticipating a recession that would affect sales tax, and recent layoffs in the area have also been a concern.
In years prior, the city has avoided layoffs and furloughs, but some departments have suffered budget cuts, restructured benefits and there have hiring freezes, Stevenson Diaz said last summer.
The police and fire departments comprise most of the city budget, accounting for about 31.5% and 24.7% of the total budget, respectively. Last fiscal year, the departments’ salaries and benefits saw a reduction of 1.2%.
The city is reevaluating firefighter and police services by conducting studies with consultants this year, and will also be looking at other ways on how to increase funding, Stevenson Diaz.
She said the city also has a $360 million capital improvement project shortfall. In other words, the city does not have enough money for the infrastructure projects it has planned for over the next five years, she said.
Before the pandemic, the city and its revenues were “healthy” and trending upward, Stevenson Diaz said last year.
“Unfortunately with the recession, we have lost $82—almost $83—million dollars over two years,” she said.
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