City Budget: Summary, Priorities, and How to Provide Input

Below is a summary of the virtual Town Hall on the City Budget that took place on Tuesday, June 8. You can watch the full video by clicking here.

Budget 101

Introduction:

Each year the City Council must approve a budget for the City to fund city operations, programs and capital projects. Typically the City adopts a two-year budget to do longer range financial planning but this year due to the economic uncertainties caused by the COVID-19 pandemic and new federal American Rescue Plan dollars, the city is approving a one year budget. As required by the City Charter, the budget is developed and introduced by the City Manager in May, and the City Council then has until the end of June to adopt a new budget with community input informing the discussion and decisions. The Council also adopts an annual appropriations ordinance at the time of budget approval to allocate revenues for city operations. The proposed budget for Fiscal Year 2022 (July 1, 2021 - June 30, 2022) is $593,725,597.

Timeline:

November-December: The previous fiscal year is closed out and any surplus revenues are identified. The Council then votes to allocate any surplus revenues (“Excess Equity”) and make any necessary mid-year budget adjustments. This is done through an amendment to the Annual Appropriations Ordinance (AAO).
February-March: The new budget process begins with internal staff development in February, with a mid-year report by March. Every two years per Council resolution, the City Manager also provides a report on unfunded liabilities and long term fiscal health.
April-May: each department goes over their budget, before a first draft of the budget is introduced from the City Manager's Office in May.
June: Several public meetings are held (beginning in May) with a final vote by the end of June. For this year, the budget vote will take place on June 29th.

Breakdown of Budget:

There are several categories that make up the structure of the budget, as described below.

General Fund ($219,421,123): This is a flexible, discretionary fund that pays for a wide array of city services. This accounts for 37% of the City budget, which represents the largest slice of the budgetary pie. Half of the General Fund is used for public safety (Police: 33%; Fire: 17%). Two thirds of the General Fund is used for personnel costs (i.e. employee salaries) and the other third for non-personnel costs.
Enterprise Funds ($129,243,744): These are fees paid for specific city services and are restricted for those specific purposes. Examples of this include the Permit Service Center, Zero Waste Fund, Sanitary Sewer Fund, and the Marina Fund.
Special Revenue Funds ($30,622,979): These are revenue sources legally restricted to a specific purpose, service or program and include tax-based revenues. Examples include Parks, Libraries, and Business Improvement Districts.

The budget includes other types of funds/revenues/expenditures, including but not limited to bonds, debt service, grants, and internal service funds.

Within the mentioned funds there are a few specific categories that utilize these funds. Two notable examples are:

Community Agency Funding ($20,526,075): These are funds to support various non-profits who provide services to the community. A majority of these funds, 52.2%, go to homeless services. Other types of community agencies include, but are not limited to, health, disability, youth, and the arts.
Capital Improvement Program ($76,813,059): This is the spending plan for various infrastructure projects. In FY22, there are 78 projects identified. This includes maintenance and upgrades to city facilities, roads and sidewalks, sewers, parks, and transportation, including the City’s fleet.

Mayor’s Priorities

It is often said that our city budget is a reflection of our community’s values. As your Mayor, I would like to share my priorities for next year’s budget.

COVID-19 response & recovery: First and foremost, we need to continue our efforts to vaccinate our population and contain COVID cases, in addition to addressing the economic impacts of the pandemic through rental, arts and small business assistance.

Fiscal Health: Replenish our General Fund Reserve which was used to balance last year’s $40 Million dollar deficit, and put aside money to fund to our Section 115 Pension Trust.

Public Safety: Fund fire prevention work such as vegetation management, clearing paths, Safe Passages and an emergency warning system. Fund expanded bike patrols in high crime areas and expanded hours for mental health crisis response. Support Violence Prevention efforts and leverage new state Violence Intervention Prevention (VIP) funding. Continue the public safety reimagining process and fund the creation of a Specialized Care Unit pilot. Increase funding for traffic calming and fund Vision Zero projects throughout Berkeley to improve pedestrian/bike safety.

Homelessness Response: Continue existing emergency shelter and social services. Launch the outdoor shelter at 742 Grayson Street, provide safe parking for vehicles, fund one or more Homekey projects, expand sanitation and public health, support trash pick up around encampments, and fund rental subsidies to get people off the street. With gratitude to the voters, these programs have been funded through Measure P

Infrastructure: Invest in fixing our roads, and other public buildings and facilities including at our Waterfront, thanks to Measures M and T1, our local dollars can be leveraged with future funding through the proposed American Jobs Plan.