As some of you know, I’m on the Board of Library Trustees for the City of Sunnyvale, where I live. Or at least I am for a few more weeks — my 4 year term ends next month. I’ve really enjoyed my time on the Board — I’ve contributed a little, learned a lot and generally was just more involved in civic government than I had been before. (I heartily recommend getting involved in the running of the city/county/state/country/place/community/neighborhood in which you live. It’s important.)
Anyway, I come to the end of my involvement as convinced as ever that public libraries are critically important to our lives as citizens, but also just as convinced that we’ll see a massive reinvention in many of the functions that libraries perform.
But that isn’t really what I want to write about today — what I want to talk about instead is the budget work that’s going on for the City of Sunnyvale in 2010 — the topic of our Library Board meeting tonight.
At the end of last year, Sunnyvale hired a new city manager, Gary Luebbers, who inherited, like so many other city managers around the country, a government facing massive shortfalls in revenue among other problems. The preamble to his budgetary response for the coming year is fantastic work, and let’s start with some of the context:
- Sunnyvale’s overall budget for 09/10 is something like $150M (plus the costs for the water treatment facility and the golf course)
- We’re expecting a decline in revenue of $13M, primarily due to a shortfall in sales tax — people & companies aren’t buying things like routers and cars as much as they used to — so we’re seeing dramatic drops
- Beyond that, the California Public Employees Retirement System (CalPERS) has seen equity declines of around 25% this year, which is leading to increased employer contributions — about $8.5M more in Sunnyvale personnel costs starting in 2011/12
So we’re seeing a 10% revenue shortfall and another 7-8% increase in costs — not to mention that after the ballot initiatives failed earlier this week, there’s an expectation that the State of California will borrow up to 8% of local property taxes (that they’ll repay eventually, but has an impact of nearly $4M in near term cash flow).
Any way you cut it, that’s a brutal context for any city to deal with — even a larger city of 100K+ residents like Sunnyvale — between revenue shortfall & increased expenditure, you’re looking at $15-20M a year.
But here’ the thing: Sunnyvale, while we’ll see cuts, is basically okay because of the extremely conservative and long-range planning that it’s done since reinvention in the 70s. We’ve got a $36M budget stabilization fund, for example — and we can draw down on that for a few years — and because of that, the cash flow interruption from the State doesn’t matter overmuch.
I have some concerns about the conservative nature of Sunnyvale city planning — I think in any normal times it’s over-constraining — but in this particular situation, facing such a brutal and cascading financial meltdown, it’s incredibly, incredibly helpful to have this strength, and is a reassuring bulwark against the effects of the broader economy.