Council approves 2-year downsized budgets, but more cuts could come

Hefty reserves should keep city fiscally solvent for now

The Pleasanton City Council approved a downsized two-year budget plan Tuesday totaling $87.3 million for the fiscal year starting July 1 and $89.4 million for fiscal 2010-11 but acknowledged that possible state takeaways of local funds and a continued recessionary economy could make it difficult to keep those budgets balanced.

"The good news is that our operating budgets for the next two years are balanced," City Manager Nelson Fialho told the council. "But the bad news is that the economy is in such a fragile state that it will probably be a challenge to keep the budgets balanced over those two years."

Actually, the total city operating budget for the coming years is $186.1 million for fiscal 2009-10 and $190.3 million for fiscal 2010-11. More than half of those totals are dedicated to Enterprise Funds (36.5 percent ands 38.5 percent, respectively); Internal Service Funds (30.5 in both budget years); Special Revenue Funds (30.4 percent and 30.8 percent) and Debt Service & Trust Funds (2.4 percent in both budget years).

Revenue and expenditure allocations in those funds, such as park district programs and activities at the Callippe Preserve golf course, balance out as separate revenue generating programs.

It's the General Fund that accounts for 46.4 percent and 46.3 percent for the two budget years that determines the financial stability of the city.

Fialho and City Finance Director Dave Culver told the council that they built the fiscal year budgets with six strategies. They included:

1. The elimination of 10 vacant positions, with no line managers and other salaried personnel hired since last September. The vacancies came from every department, ranging from public safety to the public library to parks and recreation.

2. Non-personnel costs have been reduced 5 percent in the same period, including no new office equipment, vehicles and other materials.

3. General Fund transfers to the city's capital improvement program have been suspended for the next two years. Those transfers historically have totaled about $5 million and have gone to support funding needed for such projects as the Alviso Adobe Community Park, new tennis courts, park expansion, the Bernal lighted baseball fields and the Firehouse Arts Center. Those projects have all been fully funded by previous General Fund transfers.

4. A temporary reduction in General Fund transfers to specific reserves, such as major equipment replacement, medical retiree reserves and the city's self-insurance fund.

5. A lock has been placed on the recessionary reserve funds that now total over $10 million and will be used only if needed to accommodate state property tax and gasoline tax takeaways.

6. No salary adjustments for any of the city's 60 staff managers, including Fialho and Culver, for the next 12 months and no salary adjustments for unionized employees for the same period when their current contracts expire.

"Collectively these strategies provide a good short term approach to balancing the budget without causing any layoffs or cutbacks in programs or services," Fialho said. "However they are only short-term solutions."

"My sense is that if the economic impact that we are experiencing goes beyond the next 24 months, we'll have to revisit our assumptions and probably look at our baseline expenditures, which might include not only staffing but also programs," he added.

Culver said the statewide decline in sales tax revenue is affecting both the state and local governments. In the 1970s when there was rampant inflation, he said, sales tax revenue reached close to the 20 percent mark. Even though it dropped precipitously after that due to tight money policies by the Feds, the aerospace layoffs in the 1990s and the tech bubble in 2000, "the 6.2 percent decline in sales tax revenue in calendar year 2008 was unprecedented."

And it's not over.

"Sales tax is very important to our General Fund operating budget," Culver explained. "It is cyclical, it really follows the economy. Sales tax will turn on a dime whereas property tax kind of operates in slow motion."

"Sales tax revenue is already down 10 percent this year and will fall by an estimated 13 percent in the coming fiscal year. Besides that there will be a zero percent projected increase in next year's property tax revenue compared to +3.5 percent this current fiscal year and fees from development will be at a record low."

Fialho said that he and Culver are closely monitoring the state's fiscal crisis and its potential impact on the city's budget.

"It changes almost daily but I think the last number we saw was that the state now faces a $24.3 billion deficit that it is struggling with," Fialho said. "Some of the proposals that have been bandied about include not only shifting local tax dollars to help balance the state budget, such as property tax dollars, but also a potential grab of local highway dollars, such as local gas tax dollars that we utilize quite extensively to maintain and improve our streets."

Culver pointed out that for the state to take local property and other taxes from cities and counties is nothing new, that it started in the early 1990s.

"These takeaways reduce Pleasanton's property tax revenue that the city should have by about $9 million every year," he said. "That's more than $90 million so far and it has nothing to do with what the governor and state legislature are now proposing, which will be on top of all that."

We can't do it without you.
Support local journalism.


Like this comment
Posted by Concerned
a resident of Another Pleasanton neighborhood
on Jun 16, 2009 at 11:22 am

We still haven't addressed the $140 million unfunded liabilities for pension and retiree medical benefits. We need cuts in pay and benefits, not just freezes. We have been talking about this for years but we are always behind the curve just like the state.

Like this comment
Posted by Longtime Resident
a resident of Mohr Park
on Jun 16, 2009 at 11:51 am

With the budget constraints, why are all the road/sidewalk renovation being done? For example, cutting the curbs to put those yellow nobby features? Reconstructing curbs to allow better flow of water into storm drains (not based on resident complaints!) Shouldn't these projects be put on hold to save our precious budgets? Or are these projects being done to keep full employment and make everyone look busy?

Like this comment
Posted by Shane
a resident of Another Pleasanton neighborhood
on Jun 16, 2009 at 3:18 pm

Wow, I'm surprised to read there were only 8 foreclosures reported. I'm so sorry for those families. From all the doom and gloom reporting on the media I thought everyone and their brother were losing their homes.

Like this comment
Posted by common sense
a resident of Val Vista
on Jun 16, 2009 at 3:51 pm

The budget for next year assumes no increase in property tax revenues. But, shouldn't we be assuming some sort of decrease in those revenues. Assessed values are declining and property tax revenues is a function of assessed value and I don't see enough new construction to fill the gap.

Like this comment
Posted by Jack
a resident of Another Pleasanton neighborhood
on Jun 16, 2009 at 4:10 pm

Common Sense,

you have a very good point there. I am surprised that property tax revenue has not dropped or maybe people do not not know that they can either contact the Alameda County Tax Assessor's office or go on line and request an appraisal for property values. If the appraisal comes in less than the previous appraised value then then property taxes are lowered. My kids in Dublin and in Tracy have already done it and seen significant savings.

Like this comment
Posted by Casual Viewer
a resident of Foothill Knolls
on Jun 17, 2009 at 10:19 am

I believe the corners are being modified so that the city is in code for citizens with disabilities. It allows access to the sidewalks for all. It really has nothing to do with water flow. It is very similar to the cross walks that have the beeping noise when it is time to cross.

Like this comment
Posted by Stimulus $$
a resident of Vineyard Avenue
on Jun 17, 2009 at 1:34 pm

I would not be surprised if the curb cuts are being done with federal stimulus dollars that were doled out to state and local governments with “shovel ready” projects. Doesn’t seem this type of project would provide the “bang for the buck” as our tax dollars were intended to stimulate the economy.

As far as the new ADA approved curb cuts with big yellow friction pads being easy for wheelchairs to navigate, I have my doubts. Again, more government waste and needless make-work projects.

Like this comment
Posted by Casual Observer
a resident of Foothill Knolls
on Jun 17, 2009 at 3:16 pm

The curb project has been going on throughout Pleasanton long before the stimulus package came to be. This project has been on going for a couple of years.

Like this comment
Posted by Noah
a resident of Castlewood Heights
on Jun 17, 2009 at 5:09 pm

No, No, No, I don't want my property taxes lowered. My residence is taxed based upon the 4.7 million it was appraised at when we purchaced in 2005.

Part of my wifes daily routine at the lazer derm spa is talking to the other ladies about how much property tax we pay, a subtle indication of our status up here. If our taxes were lower, that would be a hint to the other ladies that our property is worth less than theirs perhaps.

Like this comment
Posted by Scott Walsh
a resident of Pleasanton Valley
on Jun 18, 2009 at 8:35 am

Why only 3 Council members voting? Where were the other two votes--pretty important stuff here. How would you feel about one of the Unionized groups forgoing their scheduled raise to help with the economic difficulties? Would you still feel that the unionized employees (Police, Fire and Parks, Streets, Sewer)are all "Bad" people for negotiating(give and take) the contracts they have presently and for playing politics like all the other folks out there do, whether private or public sector? in private sector industries they have "Lobbyists" and in public sector, you mostly hear of Unions. I just wonder. Hope peole will respond in a civil manner to my questions of which I think this newspaper blog was originally intended and not the nastiness that is prevalent.

Like this comment
Posted by What?
a resident of Vineyard Avenue
on Jun 18, 2009 at 10:07 am

Scott, 3 votes is better than 2. I also disagree with your take on private sector employment.

Public Sector = guaranteed job, guaranteed income and benefits (for life!).

Private Sector = no guarantees, no lobbyists or union reps - at least not at my 10-employee job, savings and social security (if it's still solvent years from now.

Something has got to CHANGE in the public sector, get it!

Like this comment
Posted by Longtime Resident
a resident of Mohr Park
on Jun 18, 2009 at 10:45 am

Yes, the curb projects have been ongoing... but with the budget crisis, shouldn't the priorities be re-examined? Shouldn't government be run like a company? or should we just spend... spend.. and spend... just because it was allocated before the budget crisis... Doesn't make sense to me! Citizens got to rise up and speak up like those in Iran... even in a tyranny environment, people are speaking up... are we all lambs?

Like this comment
Posted by Longtime Resident
a resident of Mohr Park
on Jun 18, 2009 at 10:59 am

When they say "No Salary Adjustment", does that mean 'No COLA - Cost of Living Adjustment' also? From my experience, no salary adjustment doesn't mean NO C.O.L.A. Can someone clarify this? Does anyone know the definition?

Like this comment
Posted by Safety at what cost?
a resident of Another Pleasanton neighborhood
on Jun 18, 2009 at 1:21 pm

I did a little “homework” about those yellow dot things on our corners, sprouting like so many weeds in a field.
Truncated domes are designed to assist visually impaired people.
There is a real cost to taxpayers.
Here’s some initial research. It was not easy finding pricing. This is not uncommon, since suppliers want to avoid direct online cost comparisons. On another thread, someone posted a link indicating the price per square foot, not including labor, was roughly $17.00.
“…designed for the visually
impaired to feel the raised, truncated domes
with their feet. This, in combination with the
tapping cane, can alert them to a different
surface than the surrounding concrete sidewalk
and an upcoming intersection.”
Web Link
Up front cost:
“Average cost to fix wet set tiles by replacing the entire ramp: $2,500.00”
Web Link
Repair cost:
“When I repair the glue down products, I have to grind the surface (without damaging the surrounding tiles), pressure wash to remove the concrete “talcum”, let it dry for a few days, barricade, etc., etc., to the tune of $600.00 to $900.00. ”
Web Link
“… installed only by trained licensed installers , on site, fitting our product to your unique individual site conditions and contours, like no other product can. All pricing … includes labor, materials, and all installation costs, so there's no confusion as to how to install the materials, wondering if it's done's all done for you by trained professionals, with their first focus on helping you achieve your goals.”
Below is a memo from the United States Department of Transportation - Federal Highway Administration. This is an unfunded federal government mandate.
KEY POINT: From a read of the memo, it looks like Pleasanton is going beyond the requirement, since we are adding truncated domes to ramped corners that appear to be in good condition. The mandate says any new construction OR ALTERATION of sidewalk ramps must include truncated domes – “State and local governments are required to apply the minimum design standards when constructing and altering pedestrian facilities, though we encourage higher than minimum standards where possible.” (paragraph 4).
U.S. Department of Transportation
Federal Highway Administration
Subject: INFORMATION: ADAAG Detectable Warnings
(Truncated Domes) Date: May 6, 2002
From: (Original signed by)
Dwight A. Horne
Director, Office of Program Administration In reply, refer to: HIPA-20
To: Resource Center Managers
Division Administrators
Federal Lands Highway Division Engineers
Recently a number of questions have been raised by people from various agencies concerning the use of detectable warnings, specifically truncated domes, when constructing or altering curb ramps. Truncated domes are the standard design requirement for detectable warnings for determining the boundary between the sidewalk and street by people with visual disabilities.
The Department of Justice (DOJ) is the lead agency that oversees the Americans with Disabilities Act (ADA)(1990). The U.S. Access Board develops the minimum design standards for complying with the ADA. The Department of Transportation is a designated agency responsible for enforcing the standards and implementing regulations of the ADA's Title II (State and Local Government Services). The Federal Highway Administration (FHWA) is the enforcement authority for overseeing pedestrian discrimination issues under the Title II implementing regulations.
Detectable warnings were required in 1991 by the Americans with Disabilities Act Accessible Guideline (ADAAG) (regulatory standards) for hazardous vehicular ways, transit platform edges, and curb ramps. A suspension was placed on requiring detectable warnings at curb ramps and hazardous vehicular ways, but not for transit platform edges. The reason for the suspension was to conduct research on the performance of their detectability. The DOJ continued the suspension through July 26, 2001, which allowed 10 years for conducting research. The research determined that other designs used in place of truncated domes such as grooves, striations, and exposed aggregate, were not detectable in the sidewalk and roadway environment because of the similarities to other surface textures and defects. Truncated domes have a unique design that can be detected underfoot and with a cane, and other surfaces are not considered ADA equivalent and therefore do not comply with the ADA requirements.
The DOJ had the option of allowing the suspension to expire on July 26, 2001 or publish a Federal Register Notice to continue the suspension. They decided to let the suspension expire. Consequently, since July 26, 2001 detectable warnings are again required. FHWA is obligated to enforce the requirements, and State and local governments are required to apply the minimum design standards when constructing and altering pedestrian facilities, though we encourage higher than minimum standards where possible.
The original ADA design standard for truncated domes is found in ADAAG (4.29.2). After the research was conducted, a new design recommendation was made for the dimension and placement of the domes on curb ramps. Both FHWA and the U.S. Access Board are encouraging the use of the new design over the original. Information on the recommended design and other useful information are included in the attachment.
Web Link
Sidewalks, crosswalks and other walking surfaces that were
installed before July 26, 2001 are not subject to the requirements.”
Web Link
Conclusion: It looks like we are spending more than we need to. Anything built after July 26, 2001, we need to retrofit. For all other construction, we should wait until the economy improves significantly before we retrofit. Scarce taxpayer dollars need to be spent wisely.

Like this comment
Posted by Longtime Resident
a resident of Mohr Park
on Jun 18, 2009 at 3:05 pm

Thank you for such a detailed report. It is truly appreciated by those who value doing the right thing but also at the right time! We need to spend our tax dollars wisely...

It would refreshing to hear from the other side. Was something missed? Just look at Mohr Ave on the West side of Santa Rita! Lots of our hard earned tax dollars at work.

Like this comment
Posted by Safety at what cost?
a resident of Another Pleasanton neighborhood
on Jun 18, 2009 at 3:11 pm

Longtime Resident, you are most welcome. There are so many things that would be nice to have and do in this great community and for my native state of California. However, now is serious belt-tightening time. In the future, we'll have to be much smarter with how we spend tax dollars. Last time I check, there really is no money tree the stuff grows on! ;)

Like this comment
Posted by The Jackal
a resident of Vintage Hills Elementary School
on Jun 19, 2009 at 8:48 am

I would guess no salary adj does not affect COLA, notice how they don't volunteer that?

why no cuts, only eliminating unfilled positions?

Come on, sales taxes are down because citizens are cutting back on their own budgets rather than freezing them.

City of Pleasanton should do the same.

Sorry, but further commenting on this topic has been closed.

Don't be the last to know

Get the latest headlines sent straight to your inbox every day.

Couples: Reading List
By Chandrama Anderson | 0 comments | 709 views

Castlewood members considering offer from Bay Club
By Tim Hunt | 0 comments | 645 views