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Yours truly was back on the beat last week, filling in to cover the Pleasanton City Council meeting, along with other temporary duties, amid two vacancies on our staff.
I was reporting from home — although the council and staff are again meeting in-person in the city chambers again — listening to the video livestream through headphones trying while very hard to drown out a fussy baby in the other room (not unlike while writing this column…)
Though dominated by the district map vote, the March 1 session included another item very important to the future to the city, short- and long-term: the midterm budget update for the 2021-22 fiscal year. Basically, a recap of estimates for revenues and expenditures based on the first half of the year and projections ahead through June 2022.
“What I heard today was confidence in our budget, confidence in the recovery and confidence in the city of Pleasanton,” Mayor Karla Brown said after the 35-minute budget discussion.
That’s clearly the headline. The city budget is in stellar shape so far, to the point that the council enacted adjustments recommended by city staff that included spending for a projected $5,362,549 general fund surplus.
All of that money was allocated to the capital improvement program (CIP) reserves, with a specific eye on high-dollar projects in the queue such as the all-abilities playground, skate park and West Las Positas Boulevard improvements.
The surplus includes about $2.5 million in sales tax revenue above estimates, driven by purchases of consumer goods and at restaurants, hotels and gas stations — oh, and the higher prices at the register. There’s also more revenue from business license ($700,000) and documentary transfer ($400,000) taxes than expected.
Transient occupancy tax and recreation fees remain low, almost half of what they generated in the 2019 fiscal year, but the city budgeted accordingly with lesser revenue estimates last June.
Overall, there is about $4.8 million in increased general fund revenue, and when coupled with the use of some COVID reserve funds and $313,699 less in expenditures (mainly due to decreased personnel costs amid employee attrition), the result is the estimated $5.4 million surplus.
The decreased expenditures number is the difference between almost $1.3 million less in labor costs, mainly amid employee attrition, but about $966,000 more in non-labor costs such as training, transportation, repairs and materials (including higher gasoline and electricity prices, and $150,000 for employee COVID tests).
General fund revenues are now estimated at just under $136.5 million for 2021-22. The fund’s reserve is expected to be nearly $33.8 million, or 26% of operating expenses (well within city policy calling for 20%-30%), come year-end.
Looking ahead, the city does anticipate needing to use $4.4 million from its $7.4 million “rainy day fund” to balance future budgets for 2023-24, 2024-25 and 2025-26. But beyond that year, the city might have lower projected annual contributions to CalPERS due to recent high returns in the statewide retirement system, creating a potential general fund surplus from 2026-27 to 2030-31. “Might” being the operative word with such projections.
Here are some takeaways from other city-operated funds:
* The water fund is projected to have about $3.2 million less revenue than budgeted due to drought conservation, but that is offset somewhat by a $1.9 million decrease on the expense side for reduced water purchase costs from Zone 7.
* On that front, look for a council discussion next week on drought rates for water customers.
* For the sewer fund, revenues are also down (attributed in part due to less use at office buildings), but that also comes with a decrease in expenses from DSRSD charges. The city did have to buy a $255,000 flusher truck.
* The golf fund, related to operation of Callippe Preserve Golf Course, is in good shape as revenues are estimated to be up $400,006 due to increased rounds of golf and sales at the facility. The net surplus is expected to be $208,006 in light of some increased expenditures. City staff plan to return at the end of the year with a plan for a payment this year from the golf fund to the general fund as repayment of the original loan when the facility was built.
* The cemetery fund is expected to see a net surplus of $21,924.
* The repair and replacement funds have a net increase on the expenditure side of $656,489, primarily due to materials and contract costs being higher than anticipated.
The budget presentation had a bittersweet tone. It was the final council meeting for finance director Tina Olson. Her last day on the job was this Wednesday as she takes a step up to administrative services director with the city of Livermore.
Council members and Interim City Manager Brian Dolan commended Olson for her seven years of service and wished her the best. The mayor also dropped a quip through a laugh: “So reconsider, would you?”
That’s not the first time — by far — in my years of covering governing boards, including Pleasanton, that an official said something like that from the dais to a departing employee in a public meeting, intending to be complimentary while tongue-in-cheek. I’ve always found it cringeworthy. Leaving a job is a deeply personal decision, often a difficult one. The joke never really lands, and just seems awkward to an unsuspecting public. In my view, anyway.
I don’t mean to put any specific council member on blast for the comment last week (though they each chuckled at it) because it’s only the most recent example of a problem I’ve seen and heard so many times before. I just hope all electeds will choose their public jokes more carefully in the future.
The city will start recruiting for a new finance director soon, and the current staff will fill the duties in acting capacities until a permanent hire is made, according to deputy city manager Pam Ott.
Ott also confirmed that Debra Gill, the city’s director of human resources and labor relations, is retiring effective April 15 after 22 years of service to spend more time with her recently retired husband and family. The application period for HR director closes on Friday.
And of course, the council and consultants continue to search for the next permanent city manager following Nelson Fialho’s departure at the end of November.
The city of Pleasanton appears to be in the throes of a key hiring season, just like we are. And judging by the signs around town and ads online, it is clear we’re not the only ones.
Editor’s note: Jeremy Walsh has been the editor of the Pleasanton Weekly since February 2017.
