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Reduced library hours, eliminating funding for crossing guards and closing one of the fire stations in Pleasanton were just some of the dozens of services staff told the City Council last week they would have to consider cutting if the city doesn’t find new revenue options to balance its budget soon.
During a special meeting workshop on May 21, city administrators went over how the city got to the point where it might have to consider taking these drastic measures as a backup plan if the council doesn’t approve placing a half-cent tax increase ballot measure on the November ballot or if voters even approve such a ballot measure.
“Actions will be needed to balance the budget, and they’re not going to be easy decisions, but we will have to come to a balanced budget,” City Manager Gerry Beaudin said.
Ever since early 2023, the city has identified a structural budget shortfall that goes back many years and is caused by several factors.
Finance director Susan Hsieh said during the meeting that expenses have been exceeding the city’s revenues and explained how the city’s general fund long-term forecast indicates that expenditures will outpace revenues. She said that the projected deficit for the next fiscal year is about $13 million and the cumulative deficit over the next eight years is projected to exceed $110 million.
Hsieh said if there is an economic downturn the average annual deficit could be as high as $22 million and the cumulative deficit could exceed $180 million.
She attributed the budget deficit to things like the slowing of sales activities at the Stoneridge Shopping Center, the delaying of commercial and residential developments such as the Costco development, transitioning from a growing community to a mature community, and rising insurance and technology costs along with inflation affecting general costs.
But one of the main reasons for this budget shortfall, Hsieh said, was due to the pandemic affecting the city’s hotel tax — the city’s third largest revenue stream — which has been down $11 million.
While the city has been proactive in enacting near-term strategies over the years to reduce costs such as freezing some staffing positions, delaying purchasing certain equipment and limiting costs associated with contracts, Hsieh said the city has also been looking at doing something the city has never done before: asking the voters to approve a tax increase.
Ever since February, the city has been engaging the community on whether voters would consider approving a half-cent sales tax increase so that staff could bring such a ballot measure to the council for approval to place it on the November ballot.
“Increasing Pleasanton’s sales tax rate from 10.25% to 10.75% … we expect to get about $10 million in annual revenue,” Hsieh said.
No decisions have been made yet on placing such a tax increase on the ballot yet as staff still need to present the revenue measure survey results to the council at the upcoming June 4 meeting. After that, staff will present polling results about the measure along with the draft ballot measure before the council votes on placing the tax measure on the ballot later in the month.
But because there is no guarantee that the council will advance the ballot measure — or that residents will even approve the measure come Election Day — staff decided they had to come up with a backup plan in case that tax increase plan fails. That’s why all of the city’s departments came together to draw up a list of services that could either be reduced or eliminated.
“Plan B is this contingency menu that we’ve built,” Beaudin said.
While no decisions were made on the services listed in the contingency plan, there were several that were noteworthy and that could have a significant impact in Pleasanton’s quality of life if the revenue measure plan does go through.
The list started with reductions to the maintenance of city parks, medians and streets; elimination of the city’s annual lead pickup program; freezing the sustainability manager positions, which would delay implementation of the city’s Climate Action Plan; and reducing trash collection and janitorial services at city facilities and in downtown Pleasanton.
Other street and facility reductions could include reducing sidewalk and Americans with Disabilities Act repairs.
Apart from maintenance and repairs, the list of reductions also include reducing staffing and consulting support for plan checks and inspections and reducing in-person permit center hours, which would result in longer time for residents to get their permits approved and delays in developments.
One of the more prominent proposed cuts was the reduction of the Pleasanton Public Library’s hours of operation and closing the library two days a week.
“The library is so integral for Pleasanton,” longtime Pleasanton resident Kate Roush said during the meeting.
Roush spoke about the events the library hosts and how people line up before it opens and how people are still there up until it closes, which shows how important the library is to residents.
“To limit the hours of the library would definitely have an impact on Pleasanton,” she said.
Hsieh also brought up the possible elimination of city funding for crossing guards, reduced community grant funding by 50% and reduced funding for community programming such as Tri-Valley Community Television. Other reductions she brought up included the elimination of city-sponsored adult sports leagues; reduced aquatic, youth, senior and theater programs; and the elimination of certain special events.
But at the end of the list were certain police and fire services that Hsieh and some members of the council said would really have an impact on the safety of residents. On the police side, Hsieh said the city could look at eliminating or reducing certain programs such as the school resource officer, tobacco education, K9 and Alternative Response Unit programs.
She also said the city would look at freezing or eliminating vacant, part-time or temporary positions in the evidence, dispatch, records or investigation departments.
And on the fire services side, the city could look at possibly closing one of the Livermore-Pleasanton Fire Department stations in Pleasanton, which would mean longer response times for incidents.
“This is something that is very difficult,” Mayor Karla Brown said.
She said that while the city has already made about $2.5 million in cuts in non-personnel and personnel cost reductions and has looked at other avenues to save money, the community and the council will have to rally together to find ways to make these decisions of either closing a fire station or finding other services to cut if they can’t get the tax increase on the ballot.
“These are difficult times,” Councilmember Valerie Arkin said during the meeting. “There’s a potential to make very difficult decisions.”
Hsieh also said that if the city ends up finding out that placing such a measure on the ballot is not feasible, staff will come back much sooner to look at these potential reductions.
“Budget issues are always difficult,” Pleasanton resident David Ott said. “We need to be fiscally responsible in everything we do. We should have a balanced budget.”
“Before we agree to raise taxes, we should trim the budget and see what life is like one year with a trimmed budget,” Ott added. “If it’s so unbearable to live in, we can readdress it, but going right to a tax increase is the wrong way to handle business.”
Beaudin also told the council that while they have been looking at one-time funds like the rainy day fund to help balance the budget, business will not be continuing as usual and the city will still have to continue looking at its expenses.
But getting the tax increase on the ballot, according to staff and some on the council, would be a first step and would help avoid some of these service cuts.
“Tonight is looking at worst case, Plan B, and hopefully we will have other options,” Vice Mayor Julie Testa said. “I believe that this community will step forward and help us to prevent us from getting to this position to really have to make these kinds of cuts.”
Fear mongering !!
Seems that this council wants the easy way out, threaten the residents with all kinds of cuts, expecting that the residents will vote in a city wide tax upon themselves or else face the consequences. No where have I heard this council come up with ideas to increase revenue through other means. They even shot down a higher hotel tax. As someone who traveled for weekly business I never looked at what amount I paid in hotel tax to make the decision on where to book.
Jack Balch has been outspoken on reducing our spending for the last several years, yet the majority – Brown, Arkin, Testa and recently Nibert have just continued to spend like we have an open checkbook. Only recently they were forced to postpone (note postpone) the skatepark 6 million and century house 4 million. You can bet if a city tax is voted in, the majority of 4 will have those projects back in play. Time to change the majority of 4. Remember this at the ballot box.
Eliminate the funding (permanently) for the “sustainability manager” and the implementation of the “Climate Action Plan”. It’s no surprise the city has budget problems when our so called “leaders” authorize and prioritize funding for these feel good/pie in the sky items.