Five-Year Financial Plan

The Five Year Financial Plan is required under Proposition A, a Charter amendment approved by voters in November 2009. The City Charter requires the plan to forecast expenditures and revenues during the five year period, propose actions to balance revenues and expenditures during each year of the plan, and discuss strategic goals and corresponding resources for City departments.

The proposed Five Year Financial Plan published on December 9, 2014 shows that the cost of City services is projected to outpace revenue growth during the five year period. Total expenditures are growing by $984.7 million over the next five years, which represents an increase of 23 percent. Over the next five years, employee salary, pension, and fringe benefit costs are growing by $340.6 million (35 percent of total expenditure growth) and Citywide operating costs are growing by $402.0 million (41 percent of total expenditure growth). In contrast to this expenditure growth, available General Fund sources are projected to grow $566.9 million over the same period, for an overall growth of 13 percent. If the City does not take corrective action, the gap between revenues and expenditures will rise from $15.9 million to approximately $417.9 million from Fiscal Year (FY) 2015-16 to FY 2019-20.

Updates to the Plan using information on the City’s fiscal condition available through March 2015 reduce the projected budget deficit by $16.5 million during the first two years of the plan.