July 5, 2011
Dear Danville Resident or Business Owner:
On June 21, 2011, the Town Council approved the 2011/12 Operating Budget and Capital Improvement Program (Budget and CIP) for the Town of Danville and the Danville Community Development (Redevelopment) Agency.
The budget continues to be balanced, while preserving all core services, reserving funds for future capital projects and maintaining adequate reserve and contingency levels. Danville’s fiscal outlook continues to be positive, and ten-year forecasts show that the Town is holding to a course that is sustainable for the long term.
The Budget and CIP include total expenditures of $35,204,828 for all services, programs and projects to be provided or undertaken by the Town and the Community Development Agency (CDA) for the upcoming fiscal year that runs from July 1, 2011 through June 30, 2012. This includes operating expenditures of $26,761,060 for the Town and $1,156,254 for the Community Development Agency; and capital expenditures of $7,287,514.
Services provided by the Town government are based on priorities established by the Town Council. These include maintaining and promoting:
- public safety and disaster preparedness
- maintenance of community parks, facilities and infrastructure
- development standards that retain the community history and character
- recreational and enrichment opportunities for youth, adults and seniors
- economic vitality and growth
- a proactive regional presence,
- effective community partnerships, and
- community celebrations and special events
These priorities underscore a commitment to supporting and maintaining the quality of life currently enjoyed by our residents.
The national economy continues to recover from the worst economic recession since the great depression and economic growth remains slow. The State of California continues to struggle with a significant structural budget deficit that has had a major impact upon local government.
Locally, Danville’s historically strong property values peaked in 2007 and have subsequently declined over the past three years. This trend is expected to continue into 2012/13. While significant, this decline has been less than that experienced throughout Contra Costa County as a whole, indicating that Danville remains a highly desirable place in which to live and work. Other local economic indicators are more positive. Retail sales activity is improving, with 2011/12 Sales Tax receipts forecast to increase by 4.1%, after three straight years of declines. Development activity, as measured by Building, Planning and Engineering permits and revenues is forecast to increase by 9.3% in 2011/12, following declines in four of the past five years.
Revenues and Expenditures
Revenues: Total operating revenues of $31,383,389 are forecast for the year, a 3.4% increase above 2010/11. This includes $20,418,486 in General Purpose revenues, $8,642,374 in Special Purpose revenues, and $2,322,528 in CDA revenues.
Expenditures: Total Town operating expenditures of $26,761,060, represent an 8.4% reduction from 2010/11. Operating Expenditures by department include:
Police Services $7,950,233 29.7%
Maintenance Services $6,719,008 25.1%
Development & Transportation Services $4,536,656 17.0%
General Government $4,335,633 16.2%
Recreation Services $3,219,529 12.0%
CDA operating expenditures of $1,156,254 will make annual payments associated with three debt obligations for public improvements that have been made within the redevelopment project area.
Capital expenditures total $7,287,514, for 40 separate projects. The largest single expenditure is the $ 2 million allocated for the Pavement Management Program which allows the Town to perform slurry seals, chip seals and pavement overlays on public streets.
The Town currently maintains an Operating Reserve of $11,111,504, equivalent to 41.5% of the total Operating Budget.
In 2011/12, the Town expects to continue work on several major initiatives that are currently underway:
- The draft 2030 General Plan Update and E.I.R. are expected to be completed and go to public hearings before the Planning Commission and Town Council by the end of 2011. Adoption of the 2030 General Plan is expected prior to the end of 2011/12.
- Construction of the new $8.1 million Veterans Memorial Building and Senior Center is expected to be completed by the end of 2011.
- Phase 2 of the $3.9 million Information Technology Master Plan will be initiated, continuing implementation of the Town’s “Government 2.0” Program.
- Completion of the new Osage Station Park Master Plan is expected by the end of 2011/12. The plan will consider opportunities to renovate, upgrade and expand amenities at the park.
- Continuation of the Town’s Economic Development Program, supporting initiatives that benefit the retail and business community.
- Plans to pursue the East Area Annexation, including several existing neighborhoods adjacent to the Town’s eastern boundary, are expected to resume prior to the end of 2011/12.
Fiscal Challenges looking forward
Though the Town’s fiscal condition continues to be sound, there are challenges that will need to be addressed in order to maintain that condition.
The State of California: The State continues to struggle with a significant structural budget deficit that has had a major impact upon local government. Various bills under consideration by the State legislature have the potential to reduce Town revenues or increase Town costs by $1,462,129 for 2011/12. Passage of some or all of this legislation will require the Town to amend the Budget and CIP in order to maintain a balanced budget.
The State continues to pursue plans to eliminate redevelopment agencies (RDA’s) statewide, in order to siphon off constitutionally protected RDA funds and apply them toward the State budget deficit. This illegal action would directly contradict Proposition 22, which was approved by state voters in November 2010. Danville has relied extensively upon RDA funding over the past 25 years to make more that $53 million in public improvements downtown. Loss of all or a portion of these funds will affect the Town’s ability to make debt payments and make additional improvements within the downtown project area.
The Economy: The Town continues to closely track the effects of the recession upon the local economy, and upon the revenue sources upon which the Town depends to provide public services.
The Town’s Lighting and Landscape Assessment District (LLAD): The Town-wide LLAD funds major roadside and median landscaping, 50% of parks and facilities maintenance, and street lighting. Property owners are assessed based on the special benefit received from the improvements maintained by the LLAD. Current assessments are no longer sufficient to fund all LLAD activities because rates have been set at the same fixed rate since 2003, while the scope of maintenance and related costs have increased. LLAD expenditures now exceed revenues by approximately 30%, and a request for an assessment rate increase is tentatively planned for 2013.
The Town’s fiscal outlook continues to be positive, and ten-year forecasts show that Danville is holding to a course that is fiscally sustainable for the long term.
The 2011/12 Budget and CIP hold Town service levels consistent with 2010/11 levels, while maintaining healthy reserves to ensure that the Town is positioned to react quickly to changes precipitated by the State, the economy, or other unforeseen factors.
The Town continues to employ a fiscal sustainability strategy that emphasizes prioritizing services based upon the highest identified community needs, continuing to maximize operational flexibility with respect to how services are provided, and having strategies in place to react quickly when unanticipated changes occur. This will continue to assist the Town through the current fiscal times, while continuing to meet local needs and delivering quality services.
For additional information, please refer to the 2011/12 Operating Budget and Capital Improvement Program.
The Town of Danville