The Five Year Financial Plan is required under Proposition A, a Charter amendment approved by voters in November 2009. The City Charter requires the plan to forecast expenditures and revenues during the five year period, propose actions to balance revenues and expenditures during each year of the plan, and discuss strategic goals and corresponding resources for City departments.
The Five Year Financial Plan shows that the cost of City services is projected to outpace revenue growth during the five year period.
Total expenditures are projected to grow by $1,408.3 million over the next five years, which represents an increase of 29%. During the five years of the plan, baselines and reserves grow by $212.3 million (15% of total expenditure growth), employee salary, pension, and fringe benefit costs grow by $698.0 million (50% of total expenditure growth), citywide operating costs grow by $450.1 million (32% of total expenditure growth), and departmental costs are growing by $48.0 million (3% of total expenditure growth).
In contrast to expenditure growth, available General Fund sources are projected to increase by $559.9 million over the same period, an overall growth of 11%.
If the City does not take corrective action, the gap between revenues and expenditures will rise from $119 million to approximately $848.4 million from Fiscal Year (FY) 2017-18 to FY 2021-22.
As required by the Charter, the City will need to implement strategies to close the gap between sources and uses over the five-year time period.
Labels: City Government