PLEASANTON — While residents consider passing a first-of-its-kind sales tax ballot measure, the Pleasanton city manager refuted claims from the opposition over supposedly city-saving reserve funds.
If passed after the Nov. 5 election, Measure PP would impose a half-cent sales tax on a city of nearly 80,000 people. The measure would sunset after a decade, prospectively netting $100 million in new revenue – an amount officials said would all but save the city from widespread cuts to essential services such as police and fire over the next several years.
A projected deficit of about $13 million a year over the next eight years brought the measure to a vote, and most of the city council are gunning for it to pass.
The measure has evolved into a polarizing issue for this year’s mayoral candidates in one of the hottest contested races in the Tri-Valley. Incumbent Mayor Karla Brown, the ballot measure’s top champion, is attempting to stave off contender Councilman Jack Balch, who voted against putting the tax on this year’s ballot. And while the latter argues against the tax in favor of a tighter belt on the city’s funds, whomever wins the mayoral race will still have to implement the will of the voters.
That could mean overseeing major budget cuts and slashes to essential service positions throughout the city. But City Manager Gerry Beaudin in an interview with this news organization pushed back against the measure’s opponents who believe the city has over $100 million in reserve funds to buy down the city’s major deficit contributors, such as an overhanging sum of hundreds of millions of dollars in unfunded liabilities that include city workers’ pensions.
“It’s not a silver bullet,” Beaudin said of the city’s reserves. “Just like any investment, we hope that the longer we leave it there, the bigger it grows to help with those future costs. If you start chipping away at it, taking money out of it, then it doesn’t get a chance to mature and grow the way it was intended.”
The city has developed a “menu” of potential reductions to services, which includes closing a fire station, cuts to police, parks, trees and landscape maintenance, streets and facilities maintenance, libraries, senior and youth programs and special events and more.Those cuts would account for another $8.85 million in savings for the city in just one year, on top of the other $2.5 million the city previously cut this year.
But Beaudin said the rest of Pleasanton’s financial future is still not settled.
“Just because we put this menu out, doesn’t mean it’s going to be exactly this,” Beaudin said. “The council ultimately has to decide. And there will be input from the community as well.”
Part of the exasperated financial situation Pleasanton is faced with stems from losses in sales tax revenue from a previously vibrant commercial scene at the flat-lining Stoneridge Mall. The city cites the COVID-19 pandemic as the major culprit for lost sales tax money.
Another sector hit particularly hard, Beaudin added, is automobile dealerships, which experienced a significant increase in business during the pandemic and then a subsequent falter in revenues post-pandemic.
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And while Measure PP’s opposition might bank on a return of robust commercial sales tax revenues in the near future, Beaudin said his finance experts have proven otherwise. So to spend down all the city’s reserves, he said, would be fiscally irresponsible in the long term, wherein the city would just “kick the can” down the road for another administration to deal with.
“We are not in a position to recommend the use of one-time money to try to address this structural issue, this long-term issue, that the city is facing,” Beaudin said. “The long term trend for Pleasanton is a serious structural deficit.”
And for those who would question moving the measure to another election two years later, Beaudin said that’s the wrong move.
“We know there’s a problem,” Beaudin said. “You’re taking two more years, and you’re making the problem much worse.”
In simpler terms, the city’s Director of Finance Susan Hsieh responded to the tax opposition’s claims of a city-saving reserve to pay down Pleasanton’s impending debts.
“It’s not true,” Hsieh said. “We don’t have the money.”