News Release

City of Irvine
Public Information Office

1 Civic Center Plaza
Irvine, CA 92606
949-724-6029

10/16/2018

FOR IMMEDIATE RELEASE

Contact:
Public Information Office
949-724-6077
pio@cityofirvine.org

Long-term financial planning promotes transparency and prudent fiscal management in the City of Irvine

By John Russo and Marianna Marysheva

This month the Irvine City Council will consider a significant change to how Irvine prepares and approves its budget. Like nearly all California cities, Irvine creates and approves a new General Fund budget each and every year. This is not a “best practice.” If executive management’s fiscal reform proposal is approved by the City Council, Irvine will have its first-ever two-year budget, developed in the context of a comprehensive five-year financial plan, starting July 1, 2019.

City Council approval of a two-year budget cycle will build on the considered Irvine Sunshine Ordinance, which promotes transparency by giving the public an agenda notice of 12 days -- four times the minimum amount of time required by California law. 

Two-year budgets and five-year financial planning bring more accountability to government spending. They demand both staff and elected officials be proactive in calculating future revenue potential, preparing for changes in population and service demands, identifying and setting aside funds for aging infrastructure such as buildings and roads, and clearly analyzing the long-term impacts of current and future policies and initiatives. This reform will strengthen the City’s already renowned record in providing top quality services to more than 275,000 constituents while maintaining a strong financial position.

Times change and we must change with the times. There is an array of fiscal challenges today confronting American cities of all sizes. Irvine, like most cities, is seeing one of our biggest revenue generators, sales tax, flattening out as changing consumer habits upend retail sales.

Consequently, we need to be smarter and more careful in our projections. A strong, thoughtful budget matches ongoing revenue with ongoing expenses; it plans for capital expenses as specific as road repair and as expansive as building out the Orange County Great Park. And when projected numbers miss, they need to miss by a little, not a lot. Two-year budgets attached to a five-year plan make sure that expense projections and long-term obligations aren’t continually “kicked down the road” to the next year’s budget.

With City Council approval, staff would be directed to adopt a more stringent approach to analyzing data, tracking trends and potential problems, and calling for corrective budget action much earlier than in years past.

The creation of Irvine’s first two-year budget, for fiscal years 2019-2021, will begin in earnest with community input in January, when baseline budget projections are presented to the City Council. In February-March, a number of community workshops will provide residents and business leaders with the opportunity to ask questions about revenues and expenditures, and suggest changes or improvements in the presented data.

Next, City departments will present their preliminary budgets to the Finance Commission and later the City Council in open meetings. In May, a two-year budget and five-year plan, developed based on input from the earlier public meetings, will be presented to the City Council for deliberation; by law, the budget must be approved by July 1.

We look forward to the Irvine community’s new and more robust role in the budget process. The most important goal of a two-year budget and a five-year fiscal plan is to ensure that we remain fiscally vibrant, and responsible, not only for tomorrow, but for the tomorrows after that.

 

John Russo is City Manager and Marianna Marysheva is Assistant City Manager for the City of Irvine.