PLEASANTON — As Pleasanton faces what could be one of the most challenging budget seasons in recent years, the city could be facing serious cutbacks to major public services. But when will it start, and what could that look like?
Residents for months have heard from the City Council on the importance of passing the now-failed Measure PP, a half-cent sales tax which would have softened the blow of what appears to be a budget deficit totaling more than $100 million over the next eight years.
Since the measure failed in the election with 54.18%, or 18,897, of voters against the measure compared to 45.82%, or 15,983, in favor, the city council on Tuesday will begin discussing what the city’s next two fiscal years will look like as it weighs cutting over $8 million in city services to stave off an expected $13 million to $22 million annual shortfall beginning next year.
Former District 2 Councilwoman Valerie Arkin, who was replaced by incoming councilman Craig Eicher, blamed the opponents of the failed measure during one of her last meetings for allegedly claiming throughout the election that the city was withholding information from the public about its finances.
“It’s just unfortunate that it became politicized,” Arkin said during the Nov. 19 meeting. “For everybody that took part in that, shame on you. Shame on you for what you did to this city.”
Also joining the new council will be incoming District 4 Councilman Matthew Gaidos. The other glaring holes in the city’s budget include $900 million over the next decade in deferred maintenance of city facilities, overwhelming pension costs and declining retail and hotel taxes, in part due to the slumping Stoneridge Mall.
In an interview, newly elected Mayor Jack Balch, who was the only previous council member to publicly oppose the new tax, noted his vision for the possible cuts to the city’s $239 million operating budget.
“I would hope to avoid any of them, of course,” said Balch, who works during regular business hours in accounting and commercial real estate. “I think everyone in our community would hope to avoid all of them.”
Balch said residents have repeatedly identified public safety and emergency services as top priorities. Those could be reprioritized to be cut last, Balch said, though he said the community will have to weigh in. He added that he wants the city to continue finding ways to save money “and look at other ways to revenue-enhance to bridge the gap.”
According to a contingency plan from City Manager Gerry Beaudin, the $8.85 million in cuts could include services for city parks, landscape maintenance, street repair, libraries, youth and senior programs; traffic management, school crossing guards, police, fire and more.
The city is considering closing a fire station to save $1.5 million, eliminating school campus officers and K9 programs and other measures.
The new mayor argues the budget cuts may not be as dire as expected. But Beaudin said in an interview that “the reality is how cities can raise revenue – they’re limited.”
“Expenses are growing faster than revenues,” Beaudin said. “We’re not in a position where we’re going to be able to address our structural deficit in the near term with new revenue.”
The council on Tuesday is expected to create an 11-member Budget Advisory Committee to counsel officials in making the next crucial decisions. The committee will discuss budget cuts, gather community feedback, find cost-saving strategies and recommend how the council can proceed forward. Topics such as proposing new city parks fees to rent the sports fields will be on the table.
But, according to the city manager, new fees would bring in far less money than is being lost, and do little in the face of $100 million in shortfalls.
“There will be new revenue, there will be new businesses, there will be new housing in our community, but it’s not unexpected,” Beaudin said. “The issue for those things is they’re really not going to be game-changers in terms of our overall budget situation.”
Perhaps most importantly for Pleasanton’s future, according to Beaudin, continuing to cut from a “full service city” is simply “not sustainable.”
“You can’t just keep everything going when you have fewer people trying to do that work,” Beaudin said. “Even things that save us money have impacts. Everything we’re not doing creates impacts, whether inside the organization, outside, or both.”
The city’s Finance Director, Susan Hsieh, agreed.
“You can only do it for so long,” Hsieh said in an interview. “Otherwise you’re going to be behind, and you’re not going to be able to keep up.”
Beaudin said the current situation is one city officials could have seen coming a long time ago.
“You can go back to the 2016 state auditor’s reports showing trouble on the horizon,” Beaudin said.