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Dozens of Pleasanton residents made their voices heard on Tuesday as they pleaded with the Pleasanton City Council to avoid making budget cuts to the Pleasanton Public Library, the school crossing guard program and the Dolores Bengtson Aquatic Center during a special council meeting.
The special meeting on April 8 was the first time the council analyzed the city’s proposed budget cuts after months of community engagement, committee hearings and internal discussions.
“I really, sincerely, want to acknowledge that this is a challenging time for both the city as an organization and for the broader community,” City Manager Gerry said during his opening remarks at the council meeting.
“Considering the reduction or elimination of valued partnerships, programs, service and, in particular, public servants — colleagues — is not what any of us want for Pleasanton,” Beaudin added. “The community deserves better, the community deserves a strong and stable local government and that’s the path that we’re working to move toward at this time.”
After carefully reviewing each of the 21 preliminary proposed budget reduction items that staff brought up for initial feedback on Tuesday, the council concluded the six-hour meeting by pausing the conversation until Thursday (April 10).
Despite pushing the discussion until Thursday’s impromptu special meeting, the council agreed on several of staff’s budget cut recommendations such as reductions to internal services and operational support — they also agreed to not eliminate several things like the Dolores Bengtson Aquatic Center.
However there was still a lot of discussion regarding the future of the pool, different options for how to reduce library hours and the possibility of saving other city services like the school crossing guard program, which is why staff will be bringing back alternative recommendations for several of these and other items on Thursday.
Over the past year and a half the city has been warning residents of a structural budget deficit that is projected to set the city back, on average, roughly $13 million each year over the next eight years — that number could go as high as $22 million if a recession hits. These projections came from a 10-year financial forecast that was previously found to be accurate by an independent accounting firm.
Pleasanton is facing a $10.4 million budget shortfall in the 2025-26 fiscal year and a $12 million shortfall in the 2026-27 fiscal year.
The city’s structural deficit has been attributed to many things including rising personnel costs, inflation, slow real estate development, loss of revenue from hotel taxes and the city’s pandemic funds being depleted.
Other notable reasons include unfunded liability pension costs that remain at over $200 million and a $900 million infrastructure funding gap over the next decade to maintain community assets like buildings, parks, roads and pipes.
Pleasanton has taken various steps to address the structural deficit like deferring maintenance on its parks, buildings, pool and roads.
During the last fiscal year, the city specifically saved $2.5 million by freezing unfilled positions, and reducing budgets for travel and training, operational materials and supplies, and contracted services.
The city has also pursued revenue generated efforts over the past two years including increasing fees for hosting special events and using the city’s facilities and increasing fees for developers looking to build new projects in the city.
In addition, the council recently authorized the city to draw down $2 million in one-time funds from the Section 115 pension trust fund over the next two years to help offset the overall budget shortfall.
That brought down the baseline reduction target of reductions to $8.4 million in the first year and $10 million in the second year.
However, even with the inclusion of revenue being generated from the city’s first-ever Costco, the city has said that all of these cost-saving measures and revenue generating efforts will not appropriately address the overall structural deficit.
One main point of discussion that is expected to come back on Thursday is Mayor Jack Balch’s discussion about using money from the city’s capital improvement project and other post-employment benefits (OPEB) liability funds in order to decrease the overall dollar amount of budget cuts the city would need to make in the near term.
He said in the past, the city has allocated approximately $3 million to $5 million from the city’s general fund to the CIP but in the city’s forecasted budget, that allocation is closer to $10 million. So instead of using all of that money, he suggested allocating around $6 million to the CIP to fund capital needs — while acknowledging that the CIP receives funding from other sources outside of the general fund — and using that difference to decrease the city’s current deficit.
“I think we should have a strong … conversation about how much of the … general fund monies are we going to be putting to the CIP program,” Balch said. “I, given the impacts to our community in the short term, think we should really think about reducing that allocation.”
He said while he understands there are capital needs that need to be funded eventually, reducing the almost $10 million allocation down to $6 million — which is still higher than what the city has transferred in the past — would free up just over $3 million of general fund money to “help us not cut as deep into these programs here.”
As for the OPEB liability fund, Balch said it is overfunded by $1.7 million last year per the city’s audited financial statements.
“That means, it’s like we are paying 13 months of payments for a mortgage in a 12-month payment period,” he said. “I think we should try to reduce that back down to 12 months while we figure out our situation.”
“I think these two additional things, which are not part of this (preliminary budget reductions) list can help reduce the depth that we cut to,” he added.
After taking these two ideas into account with the other ways the city has tried to bring down its budget deficit during these first two years, Balch said the city would be looking at a $3.5 million deficit during the first year.
But because staff need to bring all of this information back to the council on Thursday, the council decided to move forward with discussing the list of potential reductions under the assumption that they would have to meet the original baseline reduction target.
The proposed reductions include a $2.8 million cut to Internal Services and Operational Support; $2.05 million cut to Library and Recreation; a $1.75 million cut to Parks, Streets, Facilities; a $1.66 million cut to Community Support and Human Services; and a $920,000 cut to Planning and Building.
Only 1% of the city’s police and fire departments’ budget — which is $66 million — is being considered for reduction while the city’s library and recreation services along with its community support and human services departments are each facing an 18% and 19% budget cut, respectively. However, staff have attributed this to the community’s support of public safety and their desire not to touch the police or fire department’s budget.
Internal Services and Operational Support cuts, which the council largely supported, reflect the largest reductions that will have the least impact on residents. The city will specifically be looking to reduce general administrative costs and make internal personnel changes across multiple departments.
One of the other largest cuts to city services will be to the city’s Library and Recreation department, which will have more direct impacts on the community.
According to the city, these cuts would result in the library closing two days per week and converting all adult sports (softball, basketball and bocce) to self-run programs — these cuts, staff said, will yield significant savings that will help maintain other services. Several speakers, including younger kids and teenagers, specifically talked about how these reductions would negatively affect them.
Some of the other specific cuts and reductions across the other departments include reducing park and trail maintenance; eliminating the city-funded contract for 22 crossing guard locations in Pleasanton; eliminating the School Resource Officer program and reassigning those two SRO officers; eliminating the special enforcement and investigative unit; and the reduction of funding for consultant planning and plan-checking services in the city’s permit center and for consultants across various departments — in addition to consultant reductions made in the current year budget.
The council went through each of the categories and the 21 items within each category but for the most part, most of the items will be coming back with either 10% reduction or other modifications that the council suggested — one example being that Councilmember Julie Testa suggested the library should only close one day and that the city should look at having it open later some days so that students could still benefit from the library’s late hours.
Throughout the meeting, there were several residents who suggested that instead of making cuts to things like the library and crossing guards, the city should look at making cuts to the city manager’s office and stop giving raises to city executives.
Beaudin, however, clarified that neither him nor the rest of the executive team or management at the city received any cost of living adjustment raises last year.
“The cost of living (adjustment) that was due to the managers … last September was not provided to the management group or the executive team,” Beaudin said.
Testa further defended Beaudin by saying that these budget cuts are not his fault and that the entire city should be unified in making these decisions together.
The council also reviewed seven additional potential program and service reductions that were not included in the preliminary recommendation, including the controversial proposals to close the Dolores Bengtson Aquatic Center, which would save the city an additional $1.2 million, and the closure of a Livermore-Pleasanton Fire Department station, which would save the city $1.15 million.
Other alternative reductions that were not included in the proposed staff recommended reductions were reducing support for non-emergency calls, reducing or eliminating the Alternative Response Unit, reducing the Firehouse Arts Center hours, reducing the Senior Center hours and updating the city’s sidewalk maintenance obligations.
The aquatic center and Firehouse, in particular, were big ticket items for a large majority of residents who spoke during the two and a half hour public comment period of Tuesday’s meeting.
Of note, a lot of representatives and coaches from the Pleasanton Seahawks, a swim team that regularly uses the aquatic center, offered to help the city pay for some of the capital needs at the pool — things like pool covers and a pump for the pool.
“We believe that closing one-of-a-kind assets in the city is a shortsighted view of savings,” Steve Morsilli, head coach of the Seahawks, told the council. “Eliminating one-of-a-kind assets like the pool, theater and library should not be considered before curtailing services where we have multiple assets.”
While the council decided to stick with staff’s recommendation to not close the aquatic center, Murphy noted that the pool will be brought back up during the city’s Capital Improvement Program portion of the budget discussions because of the fact that the city has identified $6 million in capital needs for that facility.
Beaudin said that while it was his first time hearing about the Seahawks team’s desire to help pay for some of those capital needs, he said the bottom line is that there are — and will be — other repair and maintenance needs at the aquatic center that will require additional funding.
“The reason the swimming pool is on the list (of alternative possible reductions) … is because of the required capital improvement that is needed,” Susan Hsieh said. “If we don’t put any investment into the pool, the pool will be shut down in a year.”
Hsieh said due to community interest, the city put together a plan to prolong the life of the pool for another three years but after that, they need to have serious conversations about the pool’s capital needs.
The council will be returning to the council chambers at 5 p.m. on Thursday (April 10) to further discuss the list of proposed budget reductions and give staff direction on which reductions to include in the city’s budget. Staff will then draft a two-year budget to present to the dais on May 20 before bringing back the final budget and proposed reductions for adoption on June 17.
City staff will also be presenting a summary of the city’s capital improvement program, which outlines current capital projects that rely on the city’s general fund for funding, and will be seeking council direction on how to prioritize these projects as the council considers the previous preliminary budget reduction.
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