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It was a mostly grim Pleasanton council meeting where tough discussions and topics came up regarding potential reductions in services, cuts to capital improvement projects and how the city will need to plan ahead in order to address its financial challenges.
One of the most notable discussions and actions the council took during its March 19 meeting was voting 4-1 — with Councilmember Jack Balch dissenting — to begin negotiations with the Pleasanton Unified School District on agreeing to share costs for the school resource officer and crossing guard programs, which the city currently finances.
The goal is to set up a multi-phased plan that would eventually have the district pay 50% of the costs to fund these programs with the city paying the rest in order to alleviate some of the city’s financial burdens. However, as City Manager Gerry Beaudin said, it will depend on the district — which is having budget challenges of its own — agree on a cost-sharing solution within the next 15 months. If it doesn’t, then the city will have to make even tougher decisions.
“They can say no and then we have to come back and decide if we want to fund it at 100%, the way that we have been … or if we have to make some different decisions,” Beaudin said.
Those decisions could include right-sizing — in other words reducing — the amount of crossing guards and school officers, Beaudin said.
The decision to look at reducing how much the city funds the crossing guard, school police officer and even the tobacco education programs was only a small part of the overall discussion last week, which mainly revolved around finding ways to improve the city’s budget and address the city’s expenditures outweighing its revenues.
During a three-part presentation, staff focused on proposed reductions to discretionary funds — which is considered money that is available to spend on things deemed useful, not completely necessary — and deleting, deferring or partially funding dozens of capital improvement program projects in order to allocate money toward critical infrastructure repairs that were caused by the 2023 winter storms, which totaled between $9 million and $16 million.
Staff also said that the city needed to start taking away money from certain projects and putting those on the shelf in order to also address road repairs to West Las Positas Boulevard — specifically between Hopyard and Stoneridge roads — which is estimated to cost anywhere from $25.9 million to $38.6 million.
Apart from these cost-containment measures the city is planning on bringing back up to the council during its midterm budget review in the coming months, staff also presented its financial assumptions and models for the next several years that outlined more of the city’s fiscal challenges.
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 all forced staff to bring up these tough conversations to the council.
Vice Mayor Julie Testa made the point that pension costs have been the No. 1 reason the city is facing these daunting fiscal challenges.
“We’ve been hearing for 20 years that this pension tsunami was going to happen,” Testa said. “So we’re not surprised that it’s happening. I just want to be honest with how did we get here and what the biggest piece is.”
Staff also said Inflation, loss of pandemic relief dollars and reduced hotel tax revenue have also put extra pressure on the city’s general fund and the aging infrastructure throughout the city which needs fixing is not helping.
Finance director Susan Hsieh added that even if Pleasanton did not have those growing pension burdens, the issue of deferred maintenance still needs to be addressed.
Other cost reduction proposals that staff discussed that could be brought to the council as staff work out its budget include reducing the city’s police and fire departments; reducing library and recreation programs; reducing park, street and building services; and cuts to other core services.
While the city is looking at making mostly non-personnel cost reductions, staff said those core-services reductions would be next on the chopping block followed by full-time and part-time personnel reductions, which would be a last resort.
And while Beaudin and Hsieh said that the city has already been tightening its belt by not hiring budgeted positions, not spending money on new programs and looking at non-essential services they can cut, Balch said no matter how they look at it, these are difficult times for the city of Pleasanton.
“Everything tonight is making me sick to my stomach,” Balch said.
“It’s difficult to palate this because from my perspective, and not trying to put salt in the wound, but being able to read financials and being unable to support the past two years of budgets because they didn’t contain spending that I thought was the best interest of our community makes it very difficult to figure out how to move forward when options are now becoming less and less available to me,” he added.
Balch also said he didn’t support the idea of putting the school programs up for discussion, along with possibly reducing the police force, because both are essential services that need to be funded by the city, which is why he voted no on entering negotiations with the district to share costs for programs that cost the city in total roughly $1.8 million every year.
Staff also spent a large majority of the meeting going over its revenues and showing how a potential economic recession combined with sales tax reductions will be negatively impacting the city’s budget over the next several years.
That’s why the city has been looking at placing a half-cent sales tax increase measure on the Nov. 5 election ballot.
The idea for such a ballot measure first came up at the council meeting on March 21, 2023, as a way to identify new revenue streams
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.
While the revenue generated from the sales tax wouldn’t help with enterprise funds like the water fund and with other infrastructure improvements, Beaudin said it is a potential general revenue stream that could help the overall general fund.
Other ways that the city is looking to cut down on costs to address those safety improvement projects like the damages from the winter storm and the West Las Positas Boulevard were deleting, deferring and partially funding capital projects like the Century House facility renovation project and the Ken Mercer Sports Park skatepark project.
Staff said that identifying these buckets of projects that would be either shelved or partially funded — which wouldn’t get the final vote until the council has its budget discussions — would help bring in about $18.9 million from those non-restricted CIP projects.
While the council did approve both the list of projects to be put on pause or not fully funded and the decision to look at recommended reductions to discretionary funds in the future, the overall consensus was that these are tough decisions the dais will need to make and that nobody wants to make them, but in order to keep the city running, they must.
“This was a difficult meeting — talk about a really bad feeling in the pit of my stomach,” Mayor Karla Brown said. “Projects that we had worked toward are getting derailed because of things like storms … global warming, heavy rains, torrential downpours, it just completely overwhelmed our storm system and caused damage that now we’re looking to have to backfill with projects that we had approved for going forward.”
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“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.”
Sounds like spin to make the tax increase cost little, if anything, if passed. Actually, it means you’ll be paying $107.50 in sales taxes for $1,000 in purchases. No small amount and easily reduced by making purchases in Dublin or Livermore instead.
Before the budget was passed by the majority of 4 last year, many of us asked them not to approved 6.5 million spend on improving the skate park and not approve 4.5 million on the century house. They didn’t listen. Now it’s being forced on the 4 to listen to the residents.
There are options with the century house. Move it and sell the land, selling the land would pay to move it and fix it up so it can generate future revenues. Sell the century house and the land with the stipulation that the buyer must keep it as a historical building. Look into and apply for grants from organizations that restore historical building. Those are just 3 ideas.
Now the skatepark. There are 3 in Pleasanton, why spend 6.5 million on improvements? The only ones I have seen using the Ken Mercer skatepark lately was kids on bicycles not even skateboards.
I for one am not sorry these two projects were delayed. I also am opposed to a 1/2 cent sales tax as long as the majority of 4 are in place. I don’t trust them with any more of my money! Time for a change, we have that opportunity this year with Arkin’s seat up and Brown’s seat up. Let’s make a change for a better future with fiscally responsible representatives. I can’t vote on Arkin’s seat as she is not in my district, but I sure can cast my vote for a better candidate for Mayor.