Santa Rosa Mayor Ernesto Olivares is proposing to move the city to a two-year budget cycle to avoid the "insanity that is our annual budget hearings."
Olivares proposed the change at Tuesday's City Council meeting, one week before three days of public hearings on the budget are scheduled to begin.
After participating in several preliminary budget hearings this year, Olivares said it struck him that the city is "doing the same thing over and over again and expecting different results."
He said he witnessed the frustration of staff and fellow council members trying to set budget priorities in a challenging fiscal environment with little public input.
"So I said &‘there's got to be another way,'" Olivares said.
He's proposing that next year's budget cover July 2012 to July 2014.
Instead of a process he said feels rushed and devoid of meaningful public input, he believes the two-year timetable would give the city time to "involve the public more dynamically" in budget decisions.
Olivares said the process would help the city's "economic and political stability" and the council would retain full control over making midyear adjustments as information comes in about tax revenues and expenditures.
There was little discussion of the proposal by his fellow council members.
"I think I might have caught them off guard," Olivares said.
After the meeting, Councilwoman Susan Gorin said there might be some benefits to a two-year budget cycle, but flexibility isn't one of them.
When she was mayor, the city was making budget cuts every quarter to respond to plunging revenues.
"It's very difficult to look at changes in the budget two years out when you are still responding to economic stagnation," she said.
Olivares cited San Luis Obispo as a city pleased with its two-year budget cycle. The city of 42,000 is about one-fourth the size of Santa Rosa.
"What can we borrow from them that we might be able to apply here?" Olivares said.
The San Luis Obispo City Hall website contains a five-page white paper about its experience with two-year budgeting. The concepts and some of the language are similar to language in Olivares' proposal.
California cities that use two-year budgeting are relatively rare. Of the state's 478 incorporated cities, Olivares said he has identified 35 that use a two-year cycle. Of the cities of 100,000 to 200,000 population, 39 use one-year budgets and six use two-year budgeting, according to research Olivares presented to his colleagues.
The idea is far from new. San Luis Obispo first did it in 1983. Windsor's done it for a decade. And congressional Republicans are pushing the White House for federal two-year budgeting in exchange for their support for increasing the national debt ceiling.
Olivares said benefits include less time and energy spent preparing budgets and better alignment of the budget with council goals.
Lawrence Chiu, the city's chief financial officer, said he likes the idea because it reduces the workload on his staff and allows them more time for "high-level analytical work."
"Another advantage is it encourages the city to do more long-term financial planning," Chiu said.
Chiu acknowledged that estimating revenues further in the future is more difficult, especially in an uncertain economy. More important than the frequency of the budget process, however, is how closely staff tracks revenues and expenditures and suggests adjustments, he said.