By Aaron Selverston The amount of cash Palo Altans are pouring into City coffers is steadily increasing, yet still not keeping pace with the skyrocketing costs of employee pensions and health care, according to a forecast presented to City Council Monday.<\/p>\n If measures are not put into place to reverse that trend, the City is in danger of being a combined $83.4 million in the hole by 2022, according to the \u201cGeneral Fund Long Range Financial Forecast<\/a>,\u201d produced by the Administrative Services department.<\/p>\n \u201cThe City\u2019s revenue projections are more positive than they have been in a few years,\u201d according to the report. \u201cHowever, benefit costs continue to outpace the rate of revenue growth.\u201d<\/p>\n The forecast is not designed to be a hard-fast prediction, per se, because it is based on a number of assumptions that may prove to be inaccurate on some level. Nonetheless, it offers a \u201csnapshot\u201d of the troubles ahead for the city if drastic changes aren\u2019t made to its \u201cstructural deficit,\u201d according to the report.<\/p>\n The City Council managed to squeak through a balanced budget in 2012 by winning tough concessions from police and fire unions<\/a> last year, among other cutbacks.<\/p>\n To achieve similar cuts moving forward, however, Council may have to outsource services<\/a>, raise taxes and fees, make permanent some position freezes, enter into public\/private partnerships, and bring union compensation down to a level equal to other city employees, among other measures.<\/p>\n The City of Palo Alto is on track to pull in more than $150 million in revenues this year, increasing to nearly $200 million in 2012, according to the forecast. But costs this year, which will hit nearly $154 million, are forecast to rise to $213 million in that same amount of time. By then, the reserve fund that was tapped to balance this year\u2019s budget will be gone.<\/p>\n
\nPatch.com
\nMay 8, 2012
\nRead original article at Patch.com<\/a><\/p>\n