EL CERRITO -- The city's 2014-15 budget will be $1 million to $1.5 million in the red without finding new revenue or making cuts to an already tight budget, the City Council was warned Tuesday in a report from the finance department.
The need will come in the midst of the loss of redevelopment money, increases in health care and retirement rates for employees, expiring labor contracts and a pessimistic outlook about the potential for further increases in tax revenue, according to the finance department report.
The $1.5 million figure amounts to what the city is projected to have in reserve when the current fiscal year ends June 30. However, the City Council has a commitment to raise its reserves to at least 10 percent of its annual general fund or about $3 million.
"If we use reserves (to fill the gap next year), we would be out of reserves," said Finance Director Lisa Malek-Zadeh.
Malek-Zadeh also gave the council an update on this year's general fund budget, which is now projected to be balanced at about $28.82 million on the strength of a nearly $300,000 expected increase in sales tax revenue.
The projected sales tax increase comes from reports of improved retail sales as well as the postponement of a settlement with Richmond of tax revenue from the Home Depot store on San Pablo Avenue that straddles the border between the two cities, Malek-Zadeh said.
"We did not anticipate the improving retail market (in our previous projections)," she said.
Expenditures increased since the council's last update in December because of greater use of employee overtime to cover for positions that have been left vacant, according to the report.
"This year we are on track with where we felt we would be and now we are turning our attention to priorities for next year," Malek-Zadeh said.
The council also awarded a $652,210 contract to create a park on the Ohlone Greenway between Fairmont Avenue and Brighton Avenue in Albany and behind the El Cerrito Plaza shopping center.
The Ohlone Greenway Natural Area will have improved bicycle and pedestrian trails, make use of "rain gardens" for natural treatment of stormwater flowing down from the hills, provide an art/mural wall, and include increased planting of native and drought-tolerant plants, among other improvements.
The project also will provide space for nature exploration in an urban setting and improve the visibility of two segments of Cerrito Creek that flow through the site.
The work is funded from an urban greening grant program under state Prop. 84, a 2006 measure dedicated to improving water quality and supply, flood control, and river and coastal protection.
Construction is scheduled to begin in May with a completion date in July.