Now that Sacramento’s 2009 / 2010 budget has been approved, what does the city’s financial picture look like for next year?

The Sacramento Press sat down with Leyne Milstein, the city’s finance director, to ask that question. Milstein outlined next year’s projected $30 million deficit and commented on the city’s “structural deficit.”

While Milstein grapples with severe city budget gaps that are tens of millions of dollars, she has a self-described “lighter side” that is evident in her choice of office decorations. An interview with Milstein would be incomplete without mention of her Magic 8 Ball collection.

Sacramento Press: What is the city’s financial outlook for the next year?

Leyne Milstein: For the fiscal year that started on July 1, we adopted a balanced budget in June. And one of the things we really need to be mindful of is this continuing impact of this economic crisis that has gripped the nation. (We need) to continually be mindful of how that’s going to impact our major tax revenues in the general fund -- and specifically property taxes and sales taxes. One of the things we’re now looking at: As the state continues to add furlough days, how is that going to affect...sales taxes?

SP: At a City Council meeting recently you mentioned a projection of a $30 million deficit for 2010/2011. Can you explain that a little bit?

LM: We still think (the $30 million projection) is fairly consistent with our estimate in June. We have some obligations that we need to be mindful of relative to our Sacramento City Employee Retirement System. So we know that costs for that will go up about $8 million.

We know that we are rolling over $8 million in one-time costs (from the 2009/2010 fiscal year). We believe that we’re going to still continue to see a decline in our property taxes.

We have some costs for some of our new facilities coming on-line...Some of our newer labor contracts -- even though we got concessions for 2010 -- include midyear raises. Small, but still 1 to 2 percent, of salary (increase) is...a cost.

SP: How can the public get involved in addressing the city’s financial obstacles?

LM: Folks can contact us, write us, e-mail, call their council members. They can call the budget office. We held community meetings all through March and April. Anybody is always welcome...We were talking about this in October, very publicly.

What we’ve really strived for, and what we tried to do when we did go out to community meetings, is to make sure that people understand the complexity of the budget. And the fact that there’s only discretion on how to spend certain portions of the budget. And that we have to respect, for legal reasons, that some dollars...can’t just be spent on anything, at any time, for any purpose.

SP: Mayor Kevin Johnson often refers to the city’s structural deficit. What is that, and how can it be addressed?

LM: Because of this ongoing decline in revenues -- and they’re continuing to decline -- we are structurally imbalanced between revenues and expenses.

When we built our 08/09 budget, we estimated a $58 million (deficit). We closed everything but $23 million. That was one-time money. So, there was a structural deficit that rolled into 09/10 of $23 million. Now, our 09/10 budget, we closed all but $8.3 million of that. So now we have, structurally, $8.3 (million) moving into 2010/2011, plus the other impacts of continued revenue decline and continued growth in expenses. So, that’s the structural problem between revenues and expenses.

SP: Looking around the office, it appears that you have a sense of fun -- even though the city is facing all of these hardships financially. I see a Gumby (doll), there’s art on the wall, some shiny fake flowers. Can you talk about how you’re balancing that sense of fun with the hard realities of working on the budget?

LM: I think life is a balance of your personal and professional. This is a really difficult job. And I do take my job very seriously. We are stewards for the residents of the city of Sacramento. But on a personal level, if I just took all the serious, and never had that lighter side, it wouldn’t be good and healthy for me.

And so, I have three Magic 8 Balls on my desk. And, you know, sometimes we play “best two-out-of-three.” Just to lighten the load. And that’s what it’s all about -- to have that balance. Honestly, I think I’m a better professional by achieving that balance. And laughing helps receive some of the stress. And so, we try and do that. And the flowers on my desk are actually things that my kids have made me over time that have become collections -- (they) are just to remind me of that other side about why I do my work.