Every other year the city council reviews and approves a two-year budget, prepared by city staff under the direction of city manager, Mike Olmos. The council just recently went through this process again for the next two-year cycle. Going forward, every six months we will get an update from city staff on how we are doing budget wise, and will be given the opportunity to tweak the same based upon any changed circumstances.
Let me share with you a few highlights from our fiscal year 14/15 and 15/16 budgets as contained in a short city publication entitled “Budget in Brief.” You may pick up your own copy of this publication at City Hall.
The “great recession” and the loss of redevelopment monies have impacted Visalia. However, based on current trends, Visalia is on a path to recovery and has successfully weathered the recent recession. This is the first budget since 2008 that does not include reduction in services, programs, maintenance or employees. The total budget for FY 14/15 is $231 million and for FY 15/16 is $199 million. Included in FY 14/15 is the Waste Water Treatment Plant’s Tertiary Project. The FY 15/16 general fund projection includes construction of the new Visalia Emergency Communications Center (VECC) in east Downtown.
During recent hard times, our general fund emergency reserves dipped down close to one million dollars, but have now been built back up to five million dollars. In the next two-year cycle, we anticipate increasing the reserves by at least $1.6 million more. The goal is to increase the emergency reserves balance to 25% of general fund operating expenditures.
In 2007, Visalia sales tax revenues reached a record of approximately $23 million dollars, before falling back in 2010 to approximately $19 million. However, our sales tax revenues recovered to $25 million in 2013, and at a projected 3% annual increase, will hit $29.2 million by FY 15/16. Additionally, the city’s property tax has increased 5.7% due to improvement in residential and commercial real estate sales and values. These two revenue sources are the city’s two main general fund revenues. They are projected to total $49.2 million in FY 15/16 or 78% of the general fund revenues.
There are still some budgetary challenges ahead. CalPERS (California Public Employees Retirement System) is still requiring cities to make up for CalPERS’s poor investment decisions in the mid to late 2000’s. This means that pension contribution rates for the city are expected to increase 13.2% for miscellaneous employees and 15.2% for public safety employees over the next five years. By FY 19/20, the city’s annual CalPERS cost will be an additional three million! Don’t forget that another employee benefit expected to increase is health care costs due to the Health Care Reform Act. As employee costs increase, future budgets will become more and more difficult to balance. Ongoing fiscal discipline will be needed to stay within our means. But we can do it. Meanwhile, we need to continue to assist with strengthening our business community so that increased tax revenues will continue to be generated. Don’t forget, shop Visalia!
If you have questions or topics regarding the city which you would like to have addressed in future articles, please email Warren at wgubler@ci.visalia.ca.us, or call (559) 713-4400 x 3313. For past articles, visit directfromwarren.blogspot.com.
Warren Gubler
Visalia Vice Mayor
