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The Pleasanton City Council, city staff and interested citizens now have the same facts to dig into the city’s financial situation as they develop a new two-year budget.
An independent auditor determined that the city staff’s estimates of a $10.8 million structural deficit in 2026 are sound and that deficit would grow based on economic conditions. The prior council majority had placed a half-cent sales tax increase on the November budget that went down to defeat. It was predicted to raise about $10 million annually.
That leaves the new council members plus the incumbents to work with staff and residents on a sustainable spending plan. A new tax measure may be part of that, but it’s two years away unless a special election by mail is called. It will take cuts to bring the budget into balance for the next two years.
Finance Director Susan Hsieh had some good news for the council at its recent meeting, noting that revenues were running $2.6 million over estimate and the budget was balanced with a tiny year-end balance of less than $7,000. The council also reviewed the audited 2024 fiscal year results that showed the reserves for the general fund had increased from $29.6 million in 2019 to $62 million with almost $34 million not designated.
City Manager Gerry Beaudin told the council that his team had identified about $14.7 in potential cuts across the various departments with $3.3 million in administrative and managerial functions included.
The challenge for the council is that staffing makes up a majority of the budget expenditures (although it’s not as dramatic as with school districts). Hsieh reported that expenses are forecast to increase 8.4%, driven by personnel costs with increases in wages and benefits.
What’s clear is the next few months will be no “honeymoon” for the newly elected members. They will be rolling up their sleeves and diving into the numbers to put together a two-year spending plan by June. Lurking in future years is the over-riding question of a plan that can be sustained—a far cry from the budget riches that the city enjoyed from the 1980s through the early 2000s.
As I alluded to in last week’s blog, neither President Donald Trump nor federal Transportation Secretary Sean Duffy have forgotten the California high-speed rail boondoggle amid the spate of issues in air travel and the Federal Aviation Administration.
They’re not passing out the free lunch the project had during the Obama and Biden administrations. Duffy announced an investigation into whether the feds should provide another $4 billion as allocated by the Biden Administration on top of the $2.7 billion already given. The project, originally projected to cost $34 billion has soared to $135 billion with no timetable or firm plan for completion on the board.
The feds also should take a close look at money allocated to tunnel under San Jose, a $13.7 billion project that is years behind the original schedule and now targeting 2037 operation. Biden’s bureaucrats tossed $5.1 billion in the pot last year and the project is working off years-old projections that are pre-pandemic and work-from-home.
Planting the seed for a tax measure in the future, Tim? You wrote that voters resoundingly defeated the tax measure in November- it wasn’t even close, remember? But the facts at the time of that vote were the same facts that we have today. Remember too when you wrote that the tax measure was only supported by city employees “who want bigger salaries.” The community remembers Tim.
Pleasanton voters were played for fools in November by Mayor Balch, his friends, and business leaders. The community will hurt for a long time because of the callous self-interest of Mayor Balch and company.