|
Getting your Trinity Audio player ready...
|
The Pleasanton City Council will be going over various budget-related items during Tuesday’s council meeting including the possibility of a sales tax measure being placed on the November election ballot, reductions to discretionary funding and staff recommendations to reallocate or defer Capital Improvement Program project funding.
According to the staff report, all of these presentations will be centered around finding ways to improve the city’s budget and identifying ways to fund important projects that affect quality of life and safety.
The first part of the council’s single public hearing item will be a presentation on sales tax and financial assumptions where the council will then provide direction to staff on some proposed reductions to discretionary funding. A discretionary fund is considered money that is available to spend on things deemed useful, not completely necessary.
“Staff will present the assumptions that were used to develop the General Fund long-term forecast and discuss alternative forecast scenarios,” according to the staff report. “To plan ahead for the fiscal year 2024-25 mid-term budget update, staff will solicit direction regarding proposed reductions to certain/timely discretionary funding as part of a cost containment strategy.”
However, apart from cost containment strategies, staff will also be going over the city’s revenue measure feasibility project, which is where the city has been gathering input from the community on the viability of placing a half-a-cent sales tax increase measure on the Nov. 5 election ballot.
The idea for such a ballot measure first came up at the council’s March 21, 2023, meeting where it directed staff to explore “viable revenue options to sustain vital city services and maintain community infrastructure, as well as ensure that resources are available to keep pace with the service needs expected by the community in future years.”
According to staff, delays in developments, a decline in sales at the Stoneridge Shopping Center and increases in insurance, pension, personnel and contract service costs, among other things, have contributed to the city’s current financial challenges.
Inflation, loss of pandemic relief dollars and reduced hotel tax revenue have also put extra pressure on the city’s General Fund — aging infrastructure throughout the city which needs fixing is also not helping.
“The city has been prudent in managing its finances,” according to the staff report. “However, as the city continues to transition from a growing to mature community, double-digit increases in property tax and sales tax are no longer being realized.”
While the city has implemented a number of cost-saving measures over the years, staff now believe it’s time to identify and expand into new revenue streams, which is why the sales tax measure could possibly be looked at as an option.
During its Aug. 15, 2023 council meeting, staff reviewed a community poll that outlined residents’ needs and what they thought about such a sales tax measure.
One takeaway from the poll was that sales tax and hotel tax revenue measures are potentially viable options. However, staff said more education and community outreach is necessary to help the community understand the city’s funding needs.
“Based on the community’s response, the City Council directed staff to launch a comprehensive outreach plan to engage, inform and listen to input from residents and stakeholders on city needs and a proposed plan to meet those needs,” according to the staff report. “If there is support from the community for a revenue measure, the intent is to place a ½ cent sales tax measure on the ballot for the Nov. 5, 2024, general election.”
If the measure is placed on the ballot and approved by voters, it would raise the city’s current 10.25% sales tax rate to 10.75%. That means the additional tax would add $5 on $1,000 taxable purchases.
According to staff, the sales tax rate for six other cities in Alameda County is at 10.75% and things like prescription medicine, devices and groceries would be exempt from the tax. Rent, mortgage payments, utilities, and other items such as goods transmitted electronically would also be exempt from sales tax.
That .50% increase is estimated to generate $10 million annually, according to staff, and would be money that is locally controlled and would stay in the city rather than being taken away by the state.
“A ½ cent sales tax increase would benefit both residents and businesses by sustaining Pleasanton’s high quality of life as funds would be used to maintain essential city services and partly fund infrastructure improvements,” according to the staff report.
One notable point in the staff report is that the revenue generated from the sales tax would not help water infrastructure and improvements.
The other half of the budget-related item at Tuesday’s meeting will be dedicated to the council reviewing staff recommendations regarding CIP projects that would be deleted, deferred or partially funded and discussing the development of the mid-term capital budget and updates to the four-year CIP.
According to the staff report, the 2024-25 mid-term capital budget is being revised in order to add critical projects that would address safety issues. Those issues include impacts from the winter storms that devastated the region in January 2023 and the reconstruction of West Las Positas Boulevard.
Because the current unrestricted CIP reserves and two-year budget cannot absorb additional costs to make improvements for those issues, staff is making the recommendation to delete, defer or partially defund about $18.9 million of existing non-restricted funds from CIP projects.
In doing so, it would address the city’s needs for the winter storm improvements and West Las Positas Boulevard reconstruction and it would also create a balanced mid-term budget, which will be presented to the council for review and approval in May and June.
While the list of projects in question is relatively long, two of the most notable projects among those being recommended for deferral or pause are the Century House Facility Renovation project and the Ken Mercer Sports Park Skatepark project. According to the staff report, those two projects and the others listed under defer or pause may stay in the four-year CIP depending on funding availability
“If these projects remain in the CIP, no funding will be expended to advance these projects until the City Council’s subsequent review as part of the preparation of the next two-year CIP budget for fiscal year 2025-26 through fiscal year 2026/27,” according to the report.
The City Council meeting is scheduled to begin at 7 p.m. Tuesday (March 19). The full agenda can be accessed here.
In other business:
* During the consent calendar, which are items considered routine in nature and are usually approved by a single vote, the council will be looking at approving plans and awarding a construction contract for the Near-Term Water Improvement Project.
According to the report, the city would be awarding JMB Construction Inc. with a contract in the amount of about $7.85 million to carry out three capital improvement projects. Staff state that these projects are required in order to “maintain a balanced water system in response to the limited availability of water from city-owned wells caused by the presence of PFAS in the aquifer, to meet future demands and to improve the reliability of the system.”
* Also as part of the consent calendar, the council will be reviewing a Pavement Management Report that was continued from the March 5 meeting. The report will go over the city’s street network pavement and its health.
