The recession is over and the economy and housing market are improving, but the city of Saratoga cannot rest on its laurels. That's the message the city's finance officers delivered in the 2014-15 fiscal year operating and capital budgets adopted this month by the Saratoga City Council.
The budget, which goes into effect on July 1 and runs through June 30, 2015, includes $18.3 million in revenue and $17.4 million in expenditure appropriations.
"I think we have probably the strongest budget that we've had since I've been in the city, and I think all citizens in the city of Saratoga should be extraordinarily proud that we managed our budget over this unprecedented economic downturn with some, but limited, reductions in service and staff," Councilman Howard Miller said.
Weeks prior to the council's adoption of the budget, Mary Furey, the city's finance and administrative services director, gave a presentation summarizing fiscal trends that impacted the budget, and the salient points of the operating and capital budgets.
She noted that similar to the previous fiscal year, the city experienced an increase in property tax revenues over the past year due to rising housing prices and an increase in home sales.
Additionally, there was a growth in planning and building revenue as remodeling construction projects resumed, Furey said. The combined revenues from those sources will result in more than $746,000 in net operations for the 2014-15 fiscal year, she added.
"Fast revenue growth coupled with expenditure reductions led to higher than expected net operations," Furey said, cautioning that property tax revenues will eventually plateau as the majority of assessed home values have been restored to pre-downturn levels, resulting in slower growth. She predicted development revenues would hold steady as long as the level of activity remains high.
Miller took an optimistic approach in viewing the state of the city's finances.
"Saratoga is the best place in the world to live, and therefore people are coming here and buying up some of the older houses and maybe even remodeling them," Miller said. "And the buying of the houses helps us with the property tax, remodeling them helps us with the community development fees, and so from that perspective the budget is looking strong."
The recent revenue growth will allow the city to allocate $300,000 to the Santa Clara County Sheriff's Office for increased school and traffic safety enforcement services. Other notable funding increases include a 13.6 percent increase in community grants to fund Destination Saratoga and the Village street closure event, and a 5.6 percent increase in internal services charges as well as a 22.8 percent increase in materials and supplies, such as new technology and equipment for the incoming city manager.
Furey highlighted three major projects in the capital improvement plan budget: $300,000 for residential street reconstruction, $200,000 for storm drain projects and $574,000 for the Quarry Park master plan implementation.The three are part of 17 new projects that are proposed to be added to the CIP budget, totaling about $2.6 million.
Furey encouraged city officials to continue to budget cautiously amid operational increases which include rising pension costs, essential contract services, and utility fees.
The final budget, with modifications, is expected to be published in September.
The city's proposed budget is available at saratoga.ca.us/cityhall/admin/budget/fy_2014_15_budget.asp.