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October 21, 2009 > City managers' economic outlook

City managers' economic outlook

By Ritu Jha

Budget deficits, job cuts and salary freezes are some of the common issues about which the city managers of Fremont, Newark and Union City spoke last Thursday at the Fremont Marriott. The City Managers' Lunch: Outlook 2009 and 2010 was attended by members of the cities' chambers of commerce, local dignitaries, businesses and city officials.

Each city manager discussed new developments, lower revenues and future plans to build more residential units in their cities. Cuts in employee salaries, hiring freezes and the struggle to manage the budget in this recession went under the spotlight.

"It was a year of events," said Larry Cheeves, City Manager, Union City, adding that Union City has a projected General Fund structural deficit of $6.7M in fiscal year 2009-10. "We have to find ways to bridge the gap," he said.

According to Cheeves, the state take-away will cost $7.7M this year; property tax-revenues are down five percent from last year. Union City plans to build more residential units and aims to reduce CO2 emissions by 2020.

"We've several projects that are in progress although the economy has slowed their implementation," Newark's City Manager, Jon Becker.

"We're projecting a $3.5M budget deficit for this fiscal year," said Becker. "The economic recession has severely impacted the city. There is no real relief in sight for the next fiscal year. Sales tax revenue has declined $4M in the past four years and property tax and hotel tax revenues are also down four percent."

The City of Newark is asking voters to approve a 3.9 percent utility users' tax (Measure L) in the November 2009 election. Low-income seniors and the school district will be exempt. Newark receives only one cent of the 9.75 cents of sales tax and 13 cents of every property-tax dollar.

Economic development is Fremont City Manager Fred Diaz's favorite topic. The audience applauded when he mentioned the long-awaited Warm Springs BART extension project. The Aqua Adventure Water Park has proved a success with season passes sold out.

On the other hand, 74 positions have been eliminated, departmental cuts are ongoing and the state will appropriate $13.1M.

On a more optimistic note, there are new civic projects such as Niles Town Plaza and Always Dream Play Park that will be completed by November 2009.

The Q&A session centered on retirement age, the future of the NUMMI plant after it closes next year and the Oakland A's relocation.

Becker was asked about the business community's sentiment towards Measure L, the proposed 3.9 percent utility users' tax. He has a good relationship with businesses and the Newark Chamber of Commerce.

"The chamber unanimously supports Measure L. To retain businesses, we must maintain the quality of life in our city," said Linda Ashley, President & CEO, Newark Chamber of Commerce. "It's important to avoid cuts to public safety to ensure fire and police can respond to emergency calls."

According to Diaz, locating suitable sites for baseball is difficult. The Oakland A's are considering all options and the City of Fremont is still interested. As for the NUMMI site and plant, the city is planning for the future and is looking for and considering options.

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