It took a special meeting ending in a 4-1 split vote, but the Visalia City Council passed the city’s annual budget just ahead of the June 30 deadline.
“Because of snafus getting the item on the agenda, we had to hold a special meeting just for the budget,” said Visalia Mayor Steve Nelsen.
The Council was originally scheduled to pass the budget at a regular meeting June 20. A clerical error delayed the vote by a week. There was no disturbance to the city’s normal operation, and those involved in crafting the budget have described the city’s projected spending as conservative and the city’s financial outlook as solid.
$198M for 16/17
The city will spend just over $197.9 million in the next 12 months. Plans for FY 17/18 call for a budget of $196.7 million. Both budgets includes surpluses.
“I would say that when you look at the budget, you do have a surplus in 16/17 and a much smaller one in 17/18, and that’s a concern,” the Mayor said, adding that City Hall is bracing itself for a possible downturn in the economy following the presidential election in November. Regardless of how the economy fairs as a whole, Visalia should be well positioned financially, Nelsen said, and uncertainty is forcing its hand.
“There’s a lot of unknowns. It’s your best guess,” he said. “There’s one sector that says we’re going to go into recession after the election. It’s a wait-and-see. That’s why I appreciate our financial group is conservative. It’s a fair budget. It’s a good look at the numbers.”
Aquatic Center for Visalia?
While longtime council member Greg Collins had no major beefs with the plan for spending in 16/17, he voted no at the June 27 special meeting, going against the other four members of the Council. At issue was whether the city should earmark money for a study on building an aquatics center.
“Over the last 25 years, we’ve lost two pools in the community of Visalia and we’ve built two community centers,” Collins, an avid swimmer, said. “We don’t have our own pool. It’s very difficult for the city to run its own aquatics programs.”
During the Council’s closed-session budget talks, Collins called for a preliminary study on an aquatics center to gather a cost estimate. Although the city budgets two years ahead and the study would not be conducted during that period, it does plan six years ahead for large capital projects. Collins wanted money for the study included there, leading to a no vote when he met resistance from three others on the Council.
Their objections, he said, centered on maintenance costs, as well as the complaint that operating an aquatics center would not pay for itself. Collins countered that the city’s convention center and baseball park also lose money, but that both attract large events and benefit other city businesses.
Visalia’s Poverty Problem
Collins also noted City Hall will be taking a new approach to dealing with homelessness in Visalia. The move is a compromise. Collins asked for room in the budget to assign a position at City Hall to oversee the city’s response. He didn’t get it.
“We had quite a bit of discussion on the homeless issue,” he said. “I was suggesting we retain somebody to be the point person for the homeless issue, as well as setting aside money for the installation of port-a-potties around the community to resolve some of the problems we’re seeing everyday.”
He got neither, but the topic is at least now open for discussion.
“They’re going to come back with a report to deal with the homeless problem in a more efficient way,” Collins said. He hopes this will give satisfaction to voters who have contacted him about the issue.
“This is something that is on the minds of the public,” Collins said. “We’re responsible for solving this problem, or at least starting to solve this problem.”
Overarching Goals
In presenting the budget to the Council, Finance Director Renee Nagel described a set of distinct goals for the current two-year funding cycle. They include the gradual return of resources cut in reaction to the Great Recession’s onset in 2008, an increase in funding for capital improvement projects–such as the $8.6 million construction of Phase 5 of the Riverway Sports Park in the 17/18 budget cycle–funding new debt payment for the Visalia Emergency Communications Center, increased maintenance of city facilities, and replenishing the city’s emergency reserve fund.
“Every city during the Great Recession basically laid off employees, which (Visalia) did not do, but we did hold positions vacant,” Nagel said. “We have been saying as each year goes we’ve been rebuilding by adding money. It’s not bringing back all the positions today. As we’re able to add positions, we’ll add positions.”
The city’s emergency fund should be at 17.2% by the end of the 16/17 budget cycle, with a smaller increase planned for the following year. Nagel said revenue projections for 17/18 have also been scaled back because of the possibility of another recession.
“We’re projecting a 3% growth for next year (16/17). We’ve been conservative for 17/18,” she said. “We went ahead and reduced our projection to 1.5% from the 3% we’ve been receiving. If there’s no recession, the council will have that. If there is a recession, at least we’re partly there.”
Building Big
The city has only two large projects planned for FY 16/17. Traffic lights will be upgraded at Goshen Avenue and Demaree Street, an already overburdened intersection that will soon be home of a new mini storage, and the Solid Waste Department is converting from the split-can collection system it uses now to a three-can scheme.
The following year, however, the city will finish the Riverway Sports Park to the tune of $8.6 million. That project will see the addition of four lighted softball fields with a concession stand, parking and a picnic area, as well as a new irrigation and pumping system.
To fund its business, the city relies mainly on sales and property taxes, as well as developers fees. It’s income is healthy and steady, Nagel reports.
“Development is occurring, so revenue is good,” she said. “The total capital for fiscal 2016 that’s being spent is $46.8 million, and then the second year it’s $45.6 million.”
While much of this money will go toward vehicle replacement, road maintenance, park construction, and replacement of sewer main and waste water infrastructure, the majority of the General Fund will be spent on firefighting, police and similar services, according to Nagel.
“On the General Fund expenditures, I just want to point out 58% is for public safety,” she said. “I think it’s important to know we do spend a large amount of our General Fund dollars on public safety. It shows it’s a priority for Visalia.”
Staff at City Hall, with Council’s approval, would like voters to approve a 0.5% sales tax to fund that public safety spending. The tax revenue will also cover increased park maintenance spending and cover the cost of hiring a recreation coordinator, Nagel said.
Special revenue funds and enterprise funds–self-supporting services like solid waste, the city’s airport and its transit system–make up the remaineder of the budget.
Transparent Spending
For those who want more detail, Nagel suggests a visit to the city’s website, visalia.city.
“We’ll be posting the budget and all the capital projects on our webpage,” she said. “The capital will be there in detail with a description of each project.”
Expect to see a sensible plan hedging against possible disquiet in the financial future.
“I would rather be ready and planning for (economic downturn) than in an emergency trying to move positions,” Nagel said. “If it doesn’t happen, we can come back and program that money. We’ll know more when we get halfway through 16/17.”
Mayor Nelsen concurs with that sentiment.
“You wait six months to a year and see how you did,” he said.