One West Valley city will be forced to tighten its belt in the coming years, as it faces a multimilliondollar budget shortfall largely due to factors outside its control.
Campbell anticipates roughly $66 million in revenue for fiscal year 2024-25, but expects to spend about $70 million, resulting in an estimated $4 million budget deficit. Two key factors exacerbating next year’s deficit problem include an estimated $600,000 loss in sales tax revenue and an obligation to pay about $1.25 million in pension costs, city documents show. Other costs include increased insurance rates and cost-of-living adjustments to labor contracts.
The city has a plan to balance its books before finalizing next year’s budget in June. It will take roughly $1.25 million from its pension reserves to cover city pension costs and use $730,000 of its American Rescue Plan funding — emergency monies it received from the federal government during the height of the pandemic to help balance the deficit. The city is considering a vacancy hiring freeze until December, which would save roughly $1.89 million, leaving about 26 city positions unfilled, City Manager Brian Loventhal told San José Spotlight.
Mayor Susan Landry said Campbell wants to keep the impact of the shortfall to a minimum, but it may be difficult to provide some services if city positions are vacant. Right now, the city is OK, she said.
“We have been extremely frugal in previous years and we set aside money, reserves for situations like this,” she told San José Spotlight. “But we can’t keep doing this. We are going to run out.”
The last time the city ran a significant shortfall was during the pandemic when everything shut down and Campbell took a large financial hit. The city faced a roughly $4 million deficit in fiscal year 2020-21, which it covered through emergency reserves, Loventhal said.
Campbell is considering what revenue-generating measures it could place on the November ballot. Nothing has been decided to date.
Randee McQueen, a longtime Campbell resident for more than 20 years and business owner of telecommunications company Communications and Control Inc., said while the city is experiencing hard times financially, she would like Campbell to keep the development and planning department intact and cut back on some of the arts programs until the city has more funding.
“I hope they can do the best that they can,” she told San José Spotlight. “I’d like to see them still helping us do little things that will make life better around here.”
While trying to balance its budget, the city is also trying to address the needs and wants of its residents. Loventhal said the city hired an housing manager this year to help with its housing goals and anticipates hiring an unhoused specialist through grant funding, to address Campbell’s homeless population.
“The problem is we want to do more than we can afford,” he told San José Spotlight. “We’re going to have to seriously look at our ability to do those things with the same or less resources.”
