An open agenda allowed time for a full-fledged budget workshop covering projections for 2018-20 at the May 1 city council meeting.
“The current budget ends June 30,” said City Manager John Donlevy. “For the most part, we had completely balanced budgets for both years.”
Director of Financial Management Shelly Gunby distributed budget sheets for the next two years; they showed both a projected increase in revenues and a decrease in spending for the city.
Projected spending will be about $7.5 million for each year compared to $8.1 million in 2016-17 and an estimated $8.2 million in 2017-18.
According to Donlevy, the city has taken hits from late development money in the form of building permit fees, which they expect to recover, but some other costs like increases in police and fire personnel and pension liability are only expected to rise.
For the city’s sewer and water, this likely translates to an increase in rates, as the revenues do not meet the costs for the services. The city council will formally discuss this in June.
The recommendation to raise those fees aligned with Donlevy’s interest in stepping out of deficit spending.
“My direction to Shelly was very clear — we’re balancing the budget,” he said.
The need to increase fire staffing is a result of an expanding fire season pulling resources for big fires happening every year throughout the state.
“We’re a victim of our own success,” said Donlevy.
The fire department has expanded the reserve program, but these firefighters are often tasked on Cal Fire assignments for a wildfire season that now lasts 9-10 months each year.
The city faces a similar issue with payments to the Yolo Emergency Communications Agency; training 911 dispatchers takes 18 months, and employees are often persuaded to work outside the county for higher wages.
“It’s totally predatory, they’re offering signing bonuses. In order to keep the people we need to keep, we had to increase wages by 5 percent,” said Donlevy.
Beyond seeking to increase water and sewer rates, and see late development money come in, the city will look for revenues in higher gas prices and transient occupancy tax from the two unbuilt hotels.
Gunby projects $300,000 per year from each hotel.
Mayor Pro Tem Bill Biasi stated that he thought the estimates for the tax revenue weren’t conservative enough, and that assuming the hotels would be up and running by January might be unrealistic.
“I don’t see any ground moving out there,” he said about the Fairfield Inn and Suites.
Donlevy said that his Christmas list for revenues the city doesn’t project included small building permits the city used to see more frequently.
“It would be nice if people would put in water heaters and install swimming pools,” said Donlevy.
Donlevy and Gunby were clear about the tight state of the budget, but asked the council to take solace in comparison to other municipalities in the state.
He said that a local policy forum for a statewide organization for city managers featured Riverside as an example for implementing policy to encourage development and the accompanying windfall of revenue.
“They have a pre-appointment meeting where developers come in and meet with planning staff and building staff before they put in the application. We’ve had that since 2004,” said Donlevy. “The only thing they have that I don’t think we’re doing is an express elevator to the meeting room.”