WALNUT CREEK -- City Council members expressed concern Tuesday night even as they approved a long-term financial plan that does not factor in key expected costs like future employee raises, added library expenses and infrastructure spending increases.
Those expense projections would have added significantly to the projected deficits facing the city through 2022.
On the other hand, the Pension Reform Act and the Affordable Care Act, which are both potential cost-saving factors for the city, were also not included in city staff's fresh analysis because of the uncertainties about their impact.
Bottom line about the bottom line -- there's still a lot to learn before more accurate predictions can be made.
"We're learning a lot more about these as time goes on and we'll keep you posted as we learn ourselves," Assistant City Manager Lorie Tinfow told the council.
Despite the unknowns, council members did express appreciation for the projections they did get that will help them make future budget decisions.
Tinfow presented a long-term financial plan to the council Tuesday that detailed three potential scenarios -- optimistic, moderate and pessimistic. City staff chose to base their projections off the "moderate" scenario, which assumes 2 percent annual growth in property tax revenues starting in fiscal year 2014-15 and 2.2 percent annual growth in sales tax revenues.
Under the "moderate" scenario, the city still faces deficits each year of about $2 million. The 2.5 percent raise negotiated by Walnut Creek police officers was included in the long-term financial plan data, but no other raises were included. While the numbers weren't included in the long-term financial plan, city staff did projected what future deficits would look like if city employees were given a 2 percent annual raise through 2022. If that scenario plays out, the city's estimated shortfalls would balloon; estimated annual added expense to the city would start at $948,000 in 2014, and reach $8,650,000 by 2022.
Next November the council will receive an updated long-term financial plan for approval. Mayor Cindy Silva was concerned that the timing of the long-term financial plan update might decrease its usefulness in budget planning.
"The long-term financial plan that we receive in the Fall will reflect a July budget," said Silva. "I have a little concern that we are getting too much lag time between an update on a budget and the long term financial plan."