Vacaville begins 2014-15 budget process with a looming deficit

By From page A3 | May 29, 2014

VACAVILLE — As the city begins to hammer together its projected $66 million budget for the 2014-15 fiscal year, one thing is obvious: Despite the temporary infusion of Measure M money, the city budget is projected to carry a deficit with a declining emergency reserve through 2017-18.

“Basically our revenues are still not keeping up with our expenditures,” City Manager Laura Kuhn said during Tuesday’s first budget study session for the 2014-15 budget.

Coupled with $3.8 million the city’s general fund has to give back to the redevelopment agency next year, and the eventual end of Measure M – a 0.25 percent sales tax increase passed by Vacaville voters in 2012 and scheduled to end in 2018 – the city needs keep watch into the 2018-19 budget, Kuhn said.

The structural deficit is projected to climb from a projected near $3.4 million in 2014-15 to about $5.7 million in 2017-18, according to a draft budget put out by the city. While expenditures also outpaced revenues last year and this year, the city received one-time funds, including redevelopment agency funds, and Measure M money that helped boost a cash flow into the general fund, increasing the emergency reserves, as well, for both years.

“Measure M is what is keeping us in the black, so to speak,” Kuhn said.

Measure M money is projected to be in the neighborhood of $3.8 million for both this year and 2014-15, but with the $3.8 million the city must pay back to the redevelopment agency, the reserve account plummets from $15.4 million this year to $11.3 million in 2014-15.

The continued structural deficit has Councilman Curtis Hunt concerned. While he said during a Wednesday interview that the city still has “to continue to do business,” it also can’t “lose focus of the structural deficit” and developing strategy is needed “to deal with it in the long run.”

He said the improving economy should relieve some of the structural deficit in combination with the budget’s conservative assumptions, but cautioned that there could be long-term consequences from a fiscal health point of view for running multiyear structural deficits – such as inadequate reserves and affecting future bond rates.

“I don’t think any one solution will be the answer,” he said Wednesday. (It’s) a combination of solutions.”

City departments also began their budget rundown before the council, with department heads giving an overview of each department, including budget projections and plans. Both police and fire leaders noted the biggest chunk of their budgets – both at 91 percent – goes to salaries and benefits.

Police Chief John Carli is working with a projected $28.6 million budget for 2014-15 with $23.7 million expected to go toward salaries and benefits. This is a nearly $2 million increase from last year, which Carli blames on an increase in health care and pension costs.

Fire Chief Frank Drayton projects a $19 million departmental budget, with $17 million going to salaries and benefits. It also is up about $1.5 million from last year’s adjusted budget.

Funding is also needed for a new fire station projected to open in September 2015 in the Southtown area. The Fire Department’s budget includes nine new firefighter/paramedics to staff the station.

Council members also heard budget presentations from the Public Works, Utilities, Human Resources, and Finance and Information Technology departments.

The budget process will continue at the June 10 council meeting.

Reach Susan Winlow at 427-6955 or [email protected] Follow her on Twitter at www.twitter.com/swinlowdr.


Discussion | 6 comments

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  • Tax PayerMay 29, 2014 - 5:43 am

    It was nice to hear Chief Drayton speak about the paramedic tax. He has found $800,000 to cover part of the $3.0 million deficit we pay each year to have our own paramedic service. If you really are serious about the budget why is it increasing in Fire. I understand Police since they are down so many more positions that fire. In Fire they have 5 per fire house, 24/7, 365 per year. He is proposing adding 5 more in Southtown. Police run 5 police officers during the hours of 2am-7am while we are fully staffed in the fire houses (mostly sleeping at that time) while being paid an average of $100,000 for working 9 days a months. Does anyone else see how crazy this is? When measure M ends all we will hear is how much the city will have to pay into the medical and retirement benefits. Nothing will be done to address the standard operating procedures of Fire. But again I am reminded, this is government and our citizens like our paramedic service. At what price to the rest of the services in the city?

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  • Tax PayerMay 29, 2014 - 5:48 am

    I would suggest all citizens get a line item for all of the departments and programs we run in this city. Check out the one for Vacaville Performing Arts and Walter Graham pool. We have run a deficit in both for many years. We actually heat the pool 365 days per year for 20 persons during the winter. VPAT we don't charge enough to cover the expense. There are so many more that the city could address if they wanted to. They only hit there employees who are tax payers to help out. When will we get really serious in "zero based" budgeting! Zero starts with zero Curtis!

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  • JBDragonMay 29, 2014 - 1:13 pm

    Oh measure M is never going away! You see, once they rely on these so called temp tax increases, they're hooked with that extra money and then it's like the world is ending when they see it'll be going away in the future, but then like always it gets extended indefinitely.

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  • ViewedMay 29, 2014 - 3:40 pm

    YOur incorrect information takes away from the validity of your argument. Please note: * Station 73 is only 3 persons * Station 75 (the new one) will only be 3 persons * Firemen work 10 days a month (30 days, 3 shifts) * Where the heck is the $3 mil deficit # from? However, you are right to question the value of different services provided by the city, especially the more costly ones like public safety.

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  • tax payerMay 29, 2014 - 5:25 pm

    Check city budget a couple years ago. It was in the first paragraph of the cities budget. Since then they haven't been as up front about the deficit. The Fire Chief is trying to cover the deficit by getting more reimbursements for transports. Now if there was ever a true zero based budget in the city the following analysis would be done. Compare cost of deficit for fire/paramedic program to the cost of private company service in all other cities in county. Then compare cost savings for salaries of fire/paramedic to salaries of private company paramedics. Next compare benefit package of fire/paramedic to private paramedic, include in Pers retirement city pays versus zero for private paramedic. Finally all cities get a yearly subsidy from the paramedic company: up to $600k to the city of Vallejo. Do the math, in the last 10 years our Cadillac service hit the general fund for over $30+ million dollars. Once measure M bandaid expires we may really get serious about the city budget! Fire's union is far too powerful and council members know they won't get elected without their support!

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  • Agenda AlertMay 29, 2014 - 8:35 pm

    I love how "Tax Payer" always gets on here and blasts Vaca Fire and always pushes for a private ambulance service. He uses the same lingo that Medic Ambulance uses at the county meetings, calling Vacaville Fire the "Cadillac plan" and touts how The city of Vallejo runs things. Vallejo has declared bankruptcy and hired their last 30 firefighters on federal grants that will run out and they run the risk of laying off personnel. The city of Vacaville has not hired anyone on a grant and has not gone bankrupt. Stop pushing for a sub-par ambulance service with brand new paramedics and EMTs. That company is terrible and constantly abuses their employees to the point where 50% of the company has less than a year experience. That's not who I want arriving at my door. Give me Vaca Fire all day every day.

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