By Reggie Ellis @Reggie_SGN
VISALIA – In the next six years, Visalia will have to work efficiently to keep its financial head above water, but it won’t have to carry the weight that may have other cities drowning in red ink.
The Visalia City Council got its first look at its next two-year budget on June 4. The proposed balanced budget totals just under $221 million in fiscal year 2018-19 and $213.5 million in 2019-20, about a 10% increase over the previous two-year budget with the biggest increase in expenditures (58%) being funded through special revenue funds such as Measure T, Measure R and the Streets fund.
Financial analyst Amee Swearingen said the city is projected to finish 2017-18 with a $4.4 million surplus, a trend that will taper off in the next two years with projected surpluses of $100,000 and $200,000. This year’s surplus is being fueled by continued growth in both sales and property taxes. Sales tax is projected to increase by 1% in each of the next two years and property tax by 2% for the next two years.
“Basically we are treading water,” Councilman Steve Nelson said.
Swearingen said expenditures are outpacing revenues and by June 2021 the city will have an operating deficit of $1 million, which will grow to $1.6 million by June 2023 due to rising pension costs, health care, an increase in minimum wage, annual operating costs, and costs associated with an aging infrastructure. The largest of those increases is the city’s contributions to pensions in California’s Public Employees Retirement System (PERS) which is expected to grow by $6.21 million between now and June 2023. Health care plans are increasing by 8% in each of the next two years, while minimum wage is increasing 26% by 2023.
“We are closer to shore and we are not carrying bowling balls,” said Councilmember Phil Cox.
Overall expenditures will grow by 7% from 2017-18 to 2018-19. The largest increases came in the administration and police department at 9% and 10% respectively, followed by Public Works (6%), Parks and Recreation (6%), Finance (5%), and Fire (3%).
Councilmember Greg Collins managed to pull out some silver linings in the future projections. Thanks to Measure N, the city will be adding 17 full-time positions over the next two years to improve services to the public. The positions include eight new officers, an identification technician, records specialist and community resource officer to the police department; four firefighters/ paramedics; as well as a maintenance mechanic and a solid waste operator.
After a decade of deferred maintenance projects on the city’s 512 miles of streets, Visalia will spend $6 million on street maintenance in addition to the $1 million the city budgets for each year.
“We are treading water but we’re close to shore,” Collins said. “We are closer than a lot of other cities.”
Each of the councilmembers had ideas of where to cut spending. Nelson suggested defunding the fireworks show, but that issue will be taken up by the council separately from the budget. Cox questioned $55,000 to replace rubberized bark at a playground, when it was essentially recycled material that should be inexpensive, and $100,000 for special playground equipment that doesn’t get as hot in the sun. Collins noticed that traffic tickets were on the low end and suggested the police department increase traffic patrols and write more tickets for violations.
“As we increase speeding and parking tickets, we should call those the Greg Collins tax,” Mayor Warren Gubler quipped.
The final version of the budget will come back before the city council at its June 18 meeting and must be approved prior to the beginning of the 2018-19 fiscal year on July 1.