Salinas Plan Implementation Update
Andrew Myrick, Senior Economic Development Manager
Office of the City Manager
January 11, 2022
Summary
The Salinas Plan is a 10-year plan to address fiscal sustainability and housing affordability.
Presented to the City Council on December 4, 2018.
Includes 32 Recommendations relating to City’s fiscal health and housing.
Staff is Systematically Exploring Each of these Recommendations.
Defining the Problem
The Plan Identified a worsening Structural Budget Deficit.
Deficits would continue to increase each year
Without action, City reserves would be depleted by 2023.
Structural Budget Deficit
Structural Vs. One-Time Items
Structural
One-Time
City Employee Positions
Debt Payments
Employee Raises/Pension/Healthcare
Maintenance
Fixed-Term or Project Consultant Contracts
Employee Stipends
Purchase of Assets (Vehicles, Equipment)
Construction of Facilities or Infrastructure
Expenditures
Revenues
Tax Revenue*
Fees
Annual Grants (CDBG)
Grants
Structural Vs. One-Time Example
Structural – City Borrows Funds
One-Time – Lump-Sum Payment
City Borrows $10 Million at 5% for 30 Years.
City Must Budget $644,185.95 Per Year for 30 Years in Addition to Maintenance.
Minor Impact to Current Year Budget.
Potential Impact to Future City Initiatives.
City Pays $10 Million At Time of Sale.
City Must Budget for Maintenance Only.
Potential Impact to Current Year Budget.
Minor Impact to Future City Initiatives.
City Purchases Parcel of Land for $10 Million
Recommendations
32 Recommendations Across 8 Categories
These Recommendations, if Implemented, are Projected to Close the Structural Budget Deficit Recommendations Also Include Measures to Improve Affordability of Housing Public Safety
Shared Services
Managed Competition & Privatization
Operational Efficiencies
Workforce
Investment Strategies
New Revenue
Risk Management
Key Initiatives
Status
City Has Nearly Met Projected Savings To-Date
However, Future Years Will Be More Challenging
Next Steps
It is generally good practice to refresh projections even under “normal” circumstances.
The Salinas Plan was developed prior to COVID-19 pandemic.
Long-term Structural Deficit probably still exists – however the magnitude is now unclear.
An update to the Salinas Plan would help the City identify the current Structural Deficit and allow a review of current and potential initiatives.
Staff will return with recommendations for an update in the future.
Questions?