Santa Paula: Fiscal Year 18-19 Budget Season Opens

By Sheryl Hamlin

Although City Manager Rock opened the May 21, 2018 Special Session with the admonition “this is preliminary … not a line item budget”, there were nuggets of information about the financial picture of the city in the report during the one hour and 45 minute meeting.

Presentation

The presentation in the public packet (click here) and posted on the city website was changed prior to the meeting. To view the revised presentation used at the meeting, which included details of departmental goals and accomplishments, click here. (May 21 Budget Draft PresentationV3_2)

Highlights

The chart entitled “FY 18/19 Proposed Budget” shows six funds. The first bar in each fund is Revenue, the second bar is Expenses, while the third bar is the Fund Balance, which are monies remaining after expenses and revenues occur.

From the chart, the General Fund, where most of the city’s day-to-day expenses occur, is balanced, in that revenues exceed expenses, and there is a small amount in the fund balance. The same is true for the Measure T fund.

However the Water Fund is problematic. Expenses exceed revenues and the fund balance (daily operations not bonds) is negative. The Sewer Fund is also problematic in that expenses exceed revenues, but the fund is positive.

There was no discussion about the Water and Sewer funds. In fact Mayor Gherardi reiterated that there are no details in this report about the enterprise funds for this meeting. The next budget meeting is June 6th, at which time there could be more details about the Enterprise Funds.

Stable Financial Health?

According to City Manager Rock, the city is in “stable financial health”, although on the General Fund Summary, he says the following: revenues projected 4% increase, while expenses are proposed to increase by 6.5%

There was no indication about future revenue growth nor future expense growth, but if one were to assume these were growth rates for the next few years, it would be obvious that there is a “Structural Deficit” wherein expenses are growing faster than revenues. In such cases, there are two solutions: 1) increase revenue (taxation) or 2) decrease expenses (cut services or layoff people).


Structural Deficit Conceptual Example

Proposed Budget Too Tight

The City Manager presented a “recommended budget” which is balanced; however, he admitted this budget is “too close” without enough cushion, so he expects to cut this for the June 4th meeting.

Measure T Monies

The bright spot in the budget was the Measure T revenue, according to Rock, which was revised upward two times. Starting at $2.19 million, then $2.4 million, and then arriving at $2.9 million for FY 18-19.

The allocations of T monies are: $2,249,422 to Police/Public Safety, $516,776 to Youth Programs and $435,000 to Public Works for streets and roads. It was stated that these allocations were made possible by removing the fire allocation from the Measure T monies because Santa Paula will no longer have a fire department after July 8, 2018. There was a detailed Measure T Report in the Regular Session which will be reported in another article.

Police Station Remodel

The Rock Recommendations include $1,000,000 from the Measure T monies for the SPPD station remodel. It must be noted that this station was designed in 1962 by the firm of Wilson, Stroh and Wilson as a county courthouse and is an example of the modernist style. It was renovated in 1980, but the front elevation was preserved. There was no discussion about the provenance of this building.

Significant Citywide Changes

From the presentation, these three effects were factored into the budget. The first is a one year pension increase, which will increase again in future years because the city cannot pay its full pension obligation to CalPERS, so the unpaid amount is accumulated with interest. The second was a permanent saving, due to the fire annexation, while the last is a regular occurrence.

General Fund Revenue FY 18/19 versus FY 17/18

This chart is significant, because it shows the effect of the fire annexation, as well as a significant increase in regular sales tax (not Measure T), and the continued dependence on transfers from the Enterprise Funds ($2,003,731). Unfortunately, the Property Tax was not broken down into secured taxes and VLF in lieu fees. This detail should be available at the June 4, 2018 meeting, according to Finance Director Easley.

Organization Changes and New Hires

The new department “Community Development Division” includes the Planning Department, Building Department and Code Enforcement. James Mason is the acting head of the CDD, an acronym used throughout the presentation. This is NOT to be confused with the Community Services Division (CSD) headed by Ed Mount.

The new Director of Public Works, Clete Saunier, was announced in the mail meeting at 6:30. Mr. Saunier is a Texan who has worked in Eagle County, Colorado and Florida. He has a BS in Engineer Geology and a BS in Civil Engineering with extensive water experience, according to the city manager. Assisting the City until Mr. Saunier gets up to speed is John Turner, Acting Public Works Director, who presented the Public Works budget on Monday, May 21st, 2018.

Citywide Requests

A slide showing pressing issues was inserted near the end of the presentation. The monies have not been identified for these items, but the wheels are turning toward action on such.

City Positions

The bar chart below shows city staffing. Note that the high in 2010 was due to the inclusion of the Solid Waste employees. The FY 18-19 staffing level drops due to the Fire Annexation.

Follow On

To watch the entire meeting, click here.

For more information on author click sherylhamlin dot com


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