News


Pleasanton's two-year city budget holds the line on hiring, wages, major projects

City sees slight rise in tax revenue, but keeps expenditures down

City Council members gave a thumbs up last night to a proposed two-year budget for fiscal years 2011/12 and 2012/13 that's not only balanced but also holds the line on hiring, wages and major expenditures.

Presented by City Manager Nelson Fialho and Finance Director Emily Wagner during a two-hour workshop, the new budgets total $189 million in the coming fiscal year that starts July 1 and $192.7 million in FY 2012/13. The city's current fiscal year budget is projected to total $185 million when the year ends on June 30. Last year's fiscal year budget totaled $183 million.

Fialho said that despite a continued sluggish economy, Pleasanton has not had to touch its millions of dollars in reserves that have been set aside in advance of the recent recession.

Most of the budget increases over the next two years were attributed to higher costs for health care and services required for municipal operations.

In addition to the key General Fund component, the city's operating budget is comprised of a number of other funds, including Enterprise Funds, Internal Service Funds, Special Revenue Funds and Debt Service & Trust Funds.

Wagner said that projected revenues earmarked for the General Fund are $87.3 million in 2011/12 and $89.7 million in 2012/13.

Tax revenue represents about 84% of the General Fund revenues, with property tax revenues representing 66% and sales tax revenues 25% of that amount.

Although many cities are experiencing sharp declines in property tax revenues as home values have declined in the past several years, Pleasanton's are not. The city is estimating property tax receipt of $48.4 million in the current fiscal year, and the same for FY 2011/12. The 2012/13 budget actually forecasts a slight increase of 2%, with receipts expected to total $49.4 million.

In fiscal year 2008/09, property taxes for Pleasanton totaled $50.4 million.

Wagner pointed recently to a slight "uptick" in sales taxes. As a result, sales tax revenue is expected to increase by 5% on both fiscal years that comprise the city's new two-year budget.

With the projected budget gaining an unofficial approval by the council, department managers representing police, fire, planning, parks and other services will prepare their own budget proposals for review at another City Council workshop on June 7. The council is expected to vote on the budget proposals at that meeting, and then to adopt the new two-year budget at its meeting June 21 in time to meet the June 30 deadline for approving a new municipal budget for the coming fiscal year.

Comments

Posted by Just a Local, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 8:18 am

Apparently the sky isn't falling after all...thanks Kay...What's next on your agenda?


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 8:29 am

Continued improvement in the city's fiscal condition. Who knew?! Oh yeah, that was me who predicted that a few months ago.

What's the guesstimated "unfunded" pension liability now? I'm reiterating my previous prediction, with even greater confidence, that it continues its' plummet toward zero over the next 2-3 years. Probably too aggressive to predict zero in time for the 2012 election, but the news will be even better than it is now.


Posted by Bill, a resident of Birdland
on May 18, 2011 at 8:29 am

This is such wonderful news because I was really worried about the cities 285 million dollar unfunded pension liability but I guess that is not a concern. Very relieved.


Posted by Bill, a resident of Birdland
on May 18, 2011 at 8:32 am

b,

This is wonderful news that the unfunded pension liability has been eliminated and as you said you were the predictor of this great achievement with the robust economic growth being achieved in this city. I wonder if we can use the cities slush fund to help the school district because with all of the money we now have it is possible to give all of the city employees including teachers at least 10% annual raises for the next 10 years!


Posted by Stacey, a resident of Amberwood/Wood Meadows
on May 18, 2011 at 8:53 am

Stacey is a registered user.

b, that's the great question, what's the unfunded pension liability now? AFAIK, there's no requirement that it needs to be funded in order to balance the budget.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on May 18, 2011 at 8:54 am

Stacey is a registered user.

This article is silent on the liability issue.


Posted by Read first, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 10:06 am

Before either side of this debate gets excited, I urge you to read the actual budget document published by the city. In order to achieve this balance budget the city will need:

- Revenue increase projections to come true
- Significant concessions from labor groups
- Continued underfunding of capital projects (parks and other public facilities)
- No more pension cost surprises from CALPERs
- etc.

We are not out of the woods yet and non-personnel costs will continue to be squeezed by growing personnel costs if assumptions don't turn out as planned.

It was stated by Ms. Wagner last night that it took a while to get into the personnel cost mess (everything was balanced in 2003 before the new employee contracts) and that it would take a while to get out of the mess. But after an additional 2.5 years, we don't have made any significant progress on personnel costs nor unfunded liabilities. This seems like quite slow progress to me.


Posted by Concerned, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 2:24 pm

This is just a status quo budget. Even with projected growth in sales taxes, payments by police,fire etc. for pensions,personnel costs amount to 78% of the budget which is unsustainable. We need to get to 65% where we used to be. There is no sign of progress towards this goal. Of course the unfunded liabilities are another huge concern. There is no provision in the budget to pay for that. The city is paying over 40% of the police and fire salaries towards their pensions. This is clearly unsustainable. If Gov. Brown's tax extensions fail we will get another huge hit and when the Fed quits printing paper money we can get a big drop in the national economy.None of the problems have been fixed and Happy days are NOT here again.


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 3:01 pm

There's no requirement that it be funded, because it is a guess. Funny money. A forward projection based on conjecture and fantasy. It could be $286 million, or it could be zero. There's no way to know.

That's what people seem to miss about this number. The current "projections" look massive and scary, but they aren't real money.


Posted by Read first, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 3:27 pm

Then I guess the dramatic increase in contribution rates (caused by the ballooning benefits/unfunded liability) is not real either? Make sure you let the city know that so they don't keep making those annual payments.


Posted by Ronc, a resident of Fairlands Elementary School
on May 18, 2011 at 4:26 pm

Ronc is a registered user.

So the City's elected official have done the first step in completing a fiscal budget for next year. I don't see why some give so much praise. The council members involved have merely done the job they were elected to do.

I have to ask though, if "many cities are experiencing sharp declines in property tax revenues as home values have declined, and Pleasanton's has not," why is that? I know my home has decreased in value since I purchased it, yet my taxes have not decreased. I think the praise belongs to the property owners who continue to pay taxes.


Posted by Mike, a resident of Highland Oaks
on May 18, 2011 at 4:32 pm

"Pleasanton has not had to touch its millions of dollars in reserves that have been set aside in advance of the recent recession."

That's probably "the millions of dollars in reserves set aside", but grammar isn't the priority problem in this sentence.

Here's my entry: "Pleasanton has not had to touch the millions of dollars in reserves set aside in advance of the recent recession because a significant number of its residents were convinced that generations of students would devolve into mouth-breathing Neanderthals unless massive amounts of money were donated to city schools before May 21st."


Posted by Dan, a resident of Bridle Creek
on May 19, 2011 at 9:59 am

Mike,

Spot on...

Regards.


If you were a member and logged in you could track comments from this story.

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: *

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields

Tough new rules on water are necessary
By Tim Hunt | 9 comments | 996 views

Saving Water
By Roz Rogoff | 4 comments | 730 views