The City Council has approved a record-high budget for fiscal 2006-07 that shows revenue continuing to increase to the General Fund despite a slowdown in housing starts and new development plans.
Based on projections, General Fund revenue for the current fiscal year will top $89 million, or about $4.5 million more than in the last fiscal year that ended June 30.
The increases came from increased sale taxes anticipated for the next 12 months of $16,183,376 and a whopping $43,632,553 in property taxes, compared to $40,139,778 in fiscal 2005-06. Across the board, Pleasanton will see revenue increases except in those areas most affected by the recent economic and housing development slowdown.
Overall, the mid-year budget has been amended to reflect additional net income of $2.1 million, which resulted from revenue increases of $2.3 million and increases to expenditures of $229,700.
Most significant was an increase of $710,000 in revenue from the newly opened Callippe Preserve golf course, which was attributed to a higher-than-anticipated number of golfers using the 18-hole course. When it opened last November, CourseCo, the contract manager for the course, and city financial analysts projected 29,000 rounds of golf on the course during the first seven months of operation. Instead, more than 45,000 rounds have been played through June 30, significantly hiking the green fees of about $60 a player and also resulting in higher revenue from food and beverage sales.
“As a result, we expect to be able to add an additional $100,000 to the $1 million in bond payments due this fall,” said David Ironmonger, deputy finance director.
For the first full budget year, as reflected in the mid-year budget approved by the council, analysts are increasing play projections from 55,000 rounds for the 12-month period to 58,000 rounds.
“This may be a conservative revenue outlook, but Callippe is a new facility and may be experiencing a ‘honeymoon effect’ with golfers tying it out for the first time,” Ironmonger said. “We really need to have a good two years’ worth of results before calculating the anticipated number of players each year.”
The slowdown in housing starts have revised the 2006-07 projections downward for fees from building permits, to $2.4 million from $2.6 million in 2005-06, and Planning and Public Works fees to $1.4 million from $1.5 million in the last fiscal year.
Receipts from the city’s hotel and motel transient occupancy tax also may be lower by about $115,000. The city expects to receive $3,061,675 this fiscal year, well under the record high of $4 million in 2000-01, the peak year for the city’s 1,829 hotel and motel rooms.
The city’s so-called “rainy day” reserves will continue to give authorities a cushion should a major recession, such as the one in late 1989 and the early 1990s, occur again. That, coupled with a $15 billion shortfall in state revenue, that caused Sacramento to take more than $60 million due Pleasanton in such categories as vehicle license fees, caused officials to beef up reserves. With changes the staff is recommending, General Fund reserves will total $17.1 million in the current fiscal year.
In accordance with the city’s financial policies, excess funds from the General Fund are set aside in the Capital Project Reserve for capital improvement projects (CIP). Besides an annual contribution of $5 million to the CIP, another $1.8 million from the year-end results of the 2005-06 budget is being added. Together, these added funds will help finance the four major capital projects the council has prioritized:
* Renovation of the Veterans Memorial Building in Main Street;
* Construction of three lighted baseball fields on the Bernal property;
* Renovation, expansion and further development of the Alviso Adobe Community Park, and,
* Planning, design work and initial construction of the Old Firehouse Art Center on Railroad Avenue.
“Overall, the city of Pleasanton remains in a strong financial position,” said City Manager Nelson Fialho. “The financial planning we have done over the last few years in building up our capital project reserves has proven to be key in funding a number of high priority projects.”
