Actually, the budget approved by the City Council June 21 has a two-year life span, covering operations totaling $87.3 million for fiscal year 2011-12 that starts today, and $89.7 million for FY 2012-13. The current operating budget is expected to close on target at $86.1 million when a full accounting of receipts and expenses is completed in about six weeks.
Although Finance Director Emily Wagner has said Pleasanton is "not out of the woods yet when it comes to economic concerns," she is also seeing a slight uptick in sales and hotel/motel tax revenue along with sustained property tax receipts. It's a different story in neighboring cities where foreclosed properties and homeowner-triggered reassessments have lowered property tax valuations and tax receipts. The state's new fiscal year budget with its gutting of redevelopment agencies is also expected to cut deeply into those cities that rely on these agencies for major development, especially Livermore. Pleasanton wisely decided against forming a redevelopment agency years ago.
Because of the "glimmer of hope" Wagner and her finance department colleagues see in the new fiscal year, the balanced two-year budgets are higher than the one that closed yesterday and well above the $84.7 million budget for FY 2009-10, which was the lowest operating budget in years. Both still fall behind the record-high $91.0 million operating budget Pleasanton claimed in FY 2007-08. Still, this year's new budget and the one for FY 20112-13 will be closely monitored by Wagner and the City Council on a quarterly basis starting in October with a detailed analysis in the city's customary mid-year budget review in January. If the guarded economic improvement turns south again, adjustments can be made to meet the new conditions without impairing services or key operations.
The new FY 2011-12 budget maintains the city's reserves of $25.3 million. Employee salaries continue to be frozen, with a hiring freeze also continuing through the two-year period. In the last two years, the city has eliminated 40 positions through attrition, which has resulted in $6 million in savings. Non-essential spending through reductions in travel and training and delays in non-essential capital projects have also cut costs. Consolidations and reorganizations within the municipal government have trimmed costs, too. Separate departments for planning, building and engineering were combined into the Community Development Department under a single director, Brian Dolan. The parks division was transferred from Community Services to the Operations Service Center, along with utility billing services. Business licenses were moved out of Finance to the Economic Development Department. Even the issuance of dog licenses will soon be moved out of City Hall to be handled by the Valley Humane Society or the county animal shelter in Dublin. Bike licenses, once handled by city staff, must now be obtained online at a national registry.
Perhaps the biggest unknown rests in Sacramento where Gov. Jerry Brown and his Democratic-controlled Legislature have crafted a state budget that could affect municipal revenue sources, including Pleasanton's. Although a voter-approved measure blocks the state from directly grabbing money from city coffers as it has done repeatedly in the past, there's talk of legislators "adjusting" the formulas for collecting and distributing property and sales taxes. Some have suggested that the distribution of these taxes be based on population instead of where the taxes are collected, formulas that might not bode well for Pleasanton.
For now, at least, Pleasanton's new fiscal year looks promising with increased revenue that can be applied to its major challenge of reducing its overall employee pension liability. That's on the council's agenda in the coming months.