It’s going to take money to fulfill the requests for new staff, raises for existing personnel and equipment required to run the city.
Each of the city’s department heads gave a presentation to the council on their needs after lean years caused by the Great Recession led to a paring down of personnel and in turn, public services.
The good news according to City Manager Jaime Fontes and a consultant that reviewed city finances, is that there is money in the bank but not enough anticipated for next fiscal year to fund all needs and requests.
The city is looking at a year-end surplus of more than $569,000 over and above the reserve but last minute expenses or shortfalls in revenue could reduce the amount that Fontes said would probably mean the city will break even by the June 30 end of the fiscal year.
One temporary loss is revenue from East Area 1: with delays in the approval process for the 1,500 unit residential development the income for permitting and processing is also held back.
Consultant Frank Catania presented a financial resources analysis of city funds and he estimated FY 2015-2016 could see $37.6 million in city coffers, a slight increase from the present fiscal year.
Catania had scant weeks to review finances including 50 separate funds including enterprises such as water and sewer as well as special funds garnered from outside sources for specific needs such as roads.
Although not an audit, “My report,” he told the council, “is a starting point for you,” to start the budget process.
The city derives its income from sales tax, property tax and some retail, with gas stations among the highest revenue generators.
It’s not enough to cover the approximate $400,000 gap Fontes calculated separates department head requests from their needs and when the council’s priorities are considered, that number could climb as high as $1 million.
And costs are increasing: although revenues are expected to increase, salaries, health benefits — employees each receive $1,100 monthly for the city’s cafeteria or another insurance plan — and workers compensation insurance are increasing, the latter dramatically.
One shared council concern raised by Councilwoman Ginger Gherardi was the rate of return on endowment funds for various amenities such as the Community Center and Harding Park.
Gherardi noted the return on the approximately $955,000 investment was low and Finance Director Sandy Easley said such funds are invested dictated by adopted policy.
“But we’re only getting about a half a percent back,” noted Mayor John Procter.
Another surprise was the $5.1 million designated as transportation funds to be used for street maintenance, repairs and improvement; city roads punctured with potholes have long been a concern of citizens.
Catania recommended that the council consider increasing the city’s General Fund Reserve from its present 10 to 12 percent, establish a cash reserve for enterprise funds, avoid using one-time funds for ongoing programs and clear negative cash balances in funds annually.
He also recommended that department heads be required to obtain approval before exceeding a department or fund budget, move bond proceeds out of the General Fund, create separate funds for the sewer and water capital improvement projects, hire staff to accelerate transportation projects and to consider upgrading the financial management system, the latter a priority of the new council majority that had been delayed since it was first addressed two years ago.
Lightly touched upon at the meeting was the 52 goals created from council input that lists everything from upgrading the financial software and filling personnel needs to hiring a part-time grant writer, giving employees an across the board salary increase as well as reinstating televising the Optimist Club Christmas Parade on Time Warner Cable.
Budget@spcity.org is the way for citizens to offer input into how the city should spend its money, a suggestion by the council who wants public input into goal setting and spending.
Goals cost money and the council wants to garner input as to what Santa Paulans consider important to the city, from roads and parks to public safety and youth recreation.
When the council fine-tunes its short-term goals, such input will be factored into decision-making on where spending will occur.
Although citizens are always welcome to offer public comment at council meetings, there will be a special May 21 Goal-setting Workshop.
