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Minding the Store – Assistant City Manager Elizabeth Warmerdam

Elizabeth Warmerdam

Assistant City Manager Elizabeth Warmerdam (Courtesy photo)

Last week, the City released its unaudited fourth quarter financial report for Fiscal Year 2012/13 on all City funds. I thought I’d share the numbers.

Over the past year, staff projected the City to be in the red. We anticipated that we would take in approximately $71.1 million from July 1, 2012 until June 30, 2013 but spend $72.4 million over that same period – a gap of $1.3 million. As it turns out, we brought in $71.9 million ($800,000 more than we expected) and spent $71.4 million ($1.0 million less than expected). On a percentage basis, this is not so significant. But when we are asked to maintain critical services with fewer resources, this is really good news. It means we are being more creative and efficient, and strictly controlling expenses on things like staffing and overtime. With the economy stumbling out of recession and home prices beginning to rebound, we are cautiously optimistic. But, we recognize these incremental wins are not enough. Our financial strength is not determined from one budget year to the next.

A better objective measure of financial health is the City’s bond rating. You might have recently read that our General Obligation bond ratings went up a notch from AA to AA+. In prior years, City Council adopted a reserve policy of at least 20% of the City’s annual expenditures. Even in this difficult economic climate, we’ve achieved this goal. Now, together with an improving Bay Area economy, the rating agency Standard and Poor’s cited the City’s strong financial management as a key factor in increasing the City’s bond ratings. No other city in Alameda County has a higher rating.

So, if you subscribe to the theory that good begets good, you’ll appreciate that with the better bond rating, and a well-timed offering, the City was able to save nearly $2 million with the refinancing of two of its previous bond issues. This allows us to fund the Emergency Operation Center at the center of the island. That essential facility was put on hold with the failure of Measure C in 2012. Not only did the AA+ rating save taxpayer dollars, it will lower the cost of borrowing in the future to help with rebuilding the infrastructure at the Alameda Point. With an estimated price tag of close to $600 million, every bit counts.

Finally, for those that continue to monitor our looming Other Post Employment Benefits (OPEB) liability and other labor issues, the City continues to make progress. As noted in the past, our employees continue to share in the costs of both their Retirement (aka PERS) and the increase in the cost of medical premiums. We have also begun informal talks with our safety unions regarding ways in which we can jointly address the OPEB liability. With labor being over 70% of our operating costs, similar to many businesses, there’s no question that these discussions are critical.

So, how well do you think are we minding the store? Tell us what you think and what matters to you at manager@alamedaca.gov. If there is an area that you are particularly concerned about, let us know.

— Elizabeth Warmerdam
— Assistant City Manager, City of Alameda

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