'Not Business As Usual': Redwood City's Budget Projects Deficits

REDWOOD CITY, CA — Redwood City’s revenue declined by more than $82 million over the past two fiscal years, according to the 2022-23 recommended budget discussed by council during Monday’s council meeting.

Nine vacancies over several departments will continue to be held next year as a result of the revenue drop over the COVID-19 pandemic, according to Melissa Stevenson Diaz, the city manager.

In a statement, Stevenson Diaz said Redwood City was approaching the upcoming fiscal year as a “year of transition.”

“We are not returning to business as usual," Stevenson Diaz said. “We remain committed to reimagining public services to adapt to new community needs and prepare for a changing future. I am optimistic we will make progress on increasing staffing next year and developing new revenue strategies to support city services and infrastructure needs.”

The recommended budget proposed a two-year process to rebuild staffing back to pre-pandemic leves with an increase in two staffers for the housing division. The city would “study fire and police services,” which make up over half of Redwood City’s expenditures to inform future staffing recommendations, according to a staff report.

Redwood City could average $10.5 million a year in budget deficits over the next five years due to revenue shortfalls and unfunded employee benefit liabilities. The city also faces a $360 million shortfall for a program intended to fund public facilities and infrastructure.

“It’s clear that new strategies to fund current services, new capital projects, and legacy costs are needed,” city officials said in a news release.

Stevenson-Diaz added that the city council’s finance and audit subcommittee will work to develop a strategy to enhance revenue, which may include examining cost-recovery fees, creating improvement districts and bond issuances for capital investments.

Click here to view a summary of the city's budget.