·Police to get another pay raise, 102 sworn officers budgeted
·General Fund subsidies to water park and golf course continue, Duran suggests privatization
·Harper declines assistant, at this time
·Ogorchock suggests selling marina, city owned land
By John Crowder
On Tuesday, April 14, 2015, the Antioch City Council held their first of three planned study sessions in preparation for the adoption of a two-year budget, covering fiscal years 2015-2016 and 2016-2017.
Dawn Merchant, Antioch’s Finance Director, presented the council with a review of the General Fund, Recreation and Animal Services Special Revenue Funds, and Prewett and Marina Enterprise funds. According to Merchant’s report, these other funds were included with a review of the General Fund because, “subsidies to these programs are integral to the General Fund budget.”
Merchant stated that the General Fund pays for police services, public works and community services, but also contributes to the subsidies.
In her slide presentation, Merchant outlined that the current fiscal year (2014-2015) is expected to end with a slight surplus of approximately $76,000, adding to the General Fund balance to bring the total amount of reserves to approximately $10.9 million. Then, going forward, the budgets show deficit spending of about $450,000 in fiscal year 2015-2016, and $1.5 million in 2016-2017, leaving the General Fund with a balance of $8.9 million at the end of the second year.
Merchant then compared the projected General Fund revenues and expenses with those in the pre-recession year of 2006-2007. She noted that actual revenues were $47 million and actual expenses $44 million, with just over $3 million added to reserves in the 2006-2007 fiscal year. For fiscal year 2015-2016, projected revenues are $48.6 million (more than the city received pre-recession, but, according to Merchant, only because of the addition of Measure C and Measure O revenue). Expenditures, however, are projected to be $49 million next year, $5 million more than the pre-recession number.
With respect to city staffing, Merchant said there were about 90 more positions with the city in 2006-2007.
Some of the revenue assumptions in the 2015-2016 budget are a 4% increase in property tax, a 3.5% increase in sales tax, and $2.3 million in Measure O revenue. One reduction in revenue that is being planned for in 2016-2017 is a loss of six months of Dispatch Reimbursement from the City of Brentwood, about $400,000. The Northeast Annexation is expected to generate an additional $450,000 revenue.
Expenditure assumptions in the 2015-2016 budget include several increases, including a 3% salary increase for the Antioch Police Officers Association (APOA) and Antioch Police Management Association (APSMA) members ($670,000), full-year furlough/salary restoration ($663,000), PERS contribution increases ($144,000), increased workers compensation premiums of 20% ($384,000), increased general liability premiums of 58% ($462,000), reinstatement of annual funding for vehicle replacement ($214,000), purchase of body cameras and tasers for police ($225,000), and the purchase of police vehicles ($450,000).
Subsidies from General Fund
Merchant then listed subsidies provided through the General Fund, including the golf course water subsidy of $118,000, the recreation and water park subsidies of $981,000, the animal services subsidy of $509,000, and the marina fund subsidy of $360,000. The latter subsidy would result if the city fails to prevail in an ongoing dispute with the state Department of Finance.
Police staffing at 102 sworn officers
Staffing assumptions included in the budget for both years include 102 police sworn staffing, the funding of one facility maintenance worker, reclassification of an incumbent employee to operations supervisor, eliminating one funded landscape maintenance lead worker, bringing funding to two operations supervisor positions, and then “all other staffing levels remain the same as in the current fiscal year.”
Staffing requests not included in the proposed budget included three community service officers ($275,000), one police records technician ($87,000), one additional code enforcement officer ($122,000, bringing the total number of code enforcement officers to four), two general laborers assigned to code enforcement ($174,000), one assistant development services-engineering technician in code enforcement ($80,000), one administrative assistant for HR/City Manager/Clerk ($85,000), one deputy city attorney ($193,000), one public works inspector ($140,000), one associate planner ($143,000), one irrigation technician (a split position of which approximately $50,000 would come from the general fund), and one part-time, temporary office assistant in the mayor’s office ($16,000).
Mayor Wade Harper, who had been asking for clarification of issues throughout the presentation, at this point addressed the mayor’s office assistant position.
“I brought that up,” he said, “and I’m not asking for it to be funded at this time.”
He then said he was “in contact with Workforce Development to see if something like that could be funded through their Earn and Learn program.” He also said that volunteer interns might also be a way to fill the position.
“I think it’s needed, I think we can do it on an intern basis. But that was my request,” Harper added.
Merchant then provided slides showing where, by department, money from the General Fund was going. She said that police (including the Animal Services subsidy) are projected in fiscal year 2015 to account for 74% of expenditures, public works for 14%, community development 7% and other departments combined to make up the remaining 5%.
Merchant discussed separately the impact to the General Fund of the Police Budget. In her report, she stated that, “the projected Police Department budgets for fiscal year 2015-2016 and 2016-2017 will significantly exceed the General Fund base plus Measure C projected revenues, thus pulling from other General Fund revenues, and reducing General fund reserves each fiscal year. Increases in the Police Department expenses are the major contributing factor to continual deficit spending in the General Fund projected budget, beginning next fiscal year.” The slide she provided at the meeting showed a difference in spending over budget of $1.6 million in fiscal year 2015-2016, and $5.1 million in fiscal year 2016-2017.
Merchant then provided slides showing General Fund projections further into the future, illustrating the impact of the projected deficit spending beginning next year, and culminating in a negative ending fund balance of $3.3 million in fiscal year 2019-2020, “in which case we’d be bankrupt at that point,” she said. This happens even though Measure C revenue would still be coming in at the time the city becomes bankrupt.
Finally, Merchant addressed the unfunded liabilities, saying in her report, “the City has a total unfunded pension liability of [approximately $78 million] for the safety and miscellaneous plans combined.”
Merchant’s report concludes the discussion of the General Fund budget with the statement, “The City cannot depend on savings to balance the budget and needs to carefully chart our course going forward to determine funding priorities. The City should only be spending within the level of revenues generated each year. We need to look for ways to achieve long term financial stability; otherwise the City will have to make dramatic cuts to services (including layoffs) in the future in order to remain solvent.”
The remainder of Merchant’s presentation was a reference to the various subsides provided out of General Fund revenues.
Following her presentation, Harper thanked Merchant for her presentation, then opened the meeting to public comments.
Three Antioch residents spoke at during the study session.
Janet Costa, Chair of the East County Regional Group, said that her group had conducted an assessment of all Antioch parks, and asked that funds be redirected to introducing more programs toward parks, especially those targeting the 0-5-year-old age group.
Antioch resident and real estate broker Mark Jordan said, “I have taken a look at the budget, and I guess that the best way that I can describe it is incredibly disappointing.”
“We are on a path to financial ruin,” he continued, “and this game is just about over.”
Referencing the “unfunded retirement accounts,” Jordan asked, “The question at hand, is, where are you gonna get the money?”
Pointing toward City Hall, he said, “Because within a very few number of years, the building behind me will be empty. All the money will be going to pay for people who no longer work for the City.”
“The solution is this. Convert the city to a charter city, and begin charging transfer fees on real property,” Jordan added.
He said charging such fees, at a rate of $13 per $1,000, would have raised about $81 million over approximately ten years, had the City been doing so.
Following public comments, Harper questioned City Manager Steve Duran after noting that Measure C “only lasts ten years.” He queried, “Are we looking at plans to increase revenues and decrease expenditures?”
“Of course that’s what we want to do,” Duran responded.
He said staff would be recommending increases to the Master Fee Schedule. Duran then spoke about the importance of Measure O, and said that this summer he wanted to bring back a “menu of some strategic decisions…including what Mr. Jordan said.”
Duran then discussed the drain on General Fund revenue related to the water park and the golf course, and said one thing to consider was privatization. He said that, perhaps, animal services should be handed back to the county.
“We have to look at our parks and [recreation] programs,” Duran added.
Council Member Monica Wilson said she was happy to hear some of the solutions that the City Manager referenced.
“I’m glad that we’re looking at the animal shelter,” she said, and added that she was looking forward to seeing the fee schedule.
Mayor Pro Tem Lori Ogorchock said the city needed to look at selling the marina, along with some of the City’s vacant land.
Council Member Mary Rocha offered her thoughts.
“These are heavy-duty issues, and the pressure from the community is going to be very large,” she stated. “Are we willing to take that hit? Because we have to stand together if we’re going to choose any one of these items to be put on for the chopping block.”
Council Member Tony Tiscareno asked Duran about real estate transfer taxes. Duran noted that the amount of money generated could be significantly higher than was currently received, but that, with respect to increasing the amount charged, “only charter cities can do that.”
Harper then asked Duran to bring more information about charter cities to the council.
As the meeting drew to a conclusion, Merchant related the schedule for future budget meetings, saying that the next budget session is scheduled for April 25th, another is on May 12, and May 26 is a “placeholder” for other items that might need to be brought back before the presentation of the entire budget on June 23.