The City of Pleasant Hill will look to approve its biennial budget for 2024-2025 which will run at a deficit. The budget assumes maintaining services and programs at current levels.
2024-2025
- $31.4 million General Fund Revenue
- $33.7 million in General Fund Expenditures
- City of Pleasant Hill is running on a $2.3 million deficit
2025-2026
- $32.21 million in General Fund Revenue
- $35.20 million in General Fund Expenditures
- City of Pleasant Hill is running at a $2.99 million deficit
According to the staff report, the preliminary budget shows that without making additional cost reductions or revenue enhancements, the City will have deficits in FY 24/25 and FY 25/26. The previous biennial budget had deficits between $1.2 million to $1.3 million, which were mainly offset by staff vacancies attributable to retirements and the challenges in hiring public safety personnel, higher sales tax revenues, and the use of one-time federal grant funding.
The Budget Committee and City Council have taken steps to enhance revenues and mitigate some of the future costs, but some will require additional steps:
- Establish a Section 115 Trust and funding policy using $1 million of General Fund reserves in May 2022. During this fiscal year, the City Council approved an additional contribution beyond the amount prescribed by the policy by transferring $300 thousand into the trust (the policy would have required contributing only an additional $57 thousand).
- The Master Fee Schedule to include full cost recovery has been approved by the Budget Committee and will go to the City Council on June 17. Those revenues are assumed in the proposed budget stability.
- This budget still assumes frozen positions throughout the City, which provides savings of $0.9 million.
- Proposed Assessment rate increases for District 20 and District 22, which, assuming passage by assessment district voters, will provide cost recovery
Within its 177 page report, the budget does not anticipate an economic downturn even with higher inflation and the current state of global affairs, as the economy overall continues to grow. Assuming this trend were to change with local impacts, the City may require additional measures to be taken in the future to address those issues.
Sales Tax: The estimate for FY 23/24 sales tax revenue is currently $10.5 million. This figure is less than the previous two fiscal years, which was slightly over or near $11.0 million, though this leveling of sales tax revenue was expected.
GENERAL FUND FIVE-YEAR FORECAST
The City traditionally creates a five-year revenue and expenditure forecast as part of the Biennial Budget.
The five-year forecast shows that the modestly increasing revenues will be outpaced by faster growing expenditures resulting in a deficit in FY 24/25 through FY 28/29 if no intervention is taken. The City has maintained a better financial position during the pandemic than originally anticipated due to improved sales tax revenues and staff vacancies (attributable to retirements and difficulty in hiring public safety personnel). The continuing economic concern of rising inflation and global events are having a negative local impact that are still unfolding. The infusion of American Rescue Plan Act funds has and will continue to provide much needed financial assistance, those funds are one-time and some of the economic benefit will be harder to be determined (e.g., assisting local businesses with website development). Nonetheless, the five-year forecast remains valuable in illustrating the impact of expected revenue and expenditure changes that will take place. It illustrates trends and highlights the impact of one significant expected expenditure increase: growing required contributions to the City’s unfunded pension liability.
The forecast assumes a 3% annual increase in revenue and expenditures for most categories except salaries, which assumes an increase of 3.25%. Also, sales tax and property tax projections were updated based on the most recent estimates provided by the City’s consultants. The tables below illustrate the General Fund five-year forecast by summary revenue and expenditure type, by department, and by detailed revenue and expenditure type.
If You Go:
Pleasant Hill City Council Meeting
June 17, 2024 at 7:00 pm
100 Gregory Lane, Pleasant Hill
Staff Report
- Printout
- Proposed Resolution – Biennial Budget(This file has not yet been converted to a viewable format)
- Proposed Biennial Budget FY 25 & FY26
Others with Budget Issues
- June 14 – BART Approves Budget While Heading Towards Fiscal Cliff
- June 4 – Pittsburg Budget Shows $3.6 Million Deficit, 13% Loss in Sales Tax
- May 30 – Sales Tax Measure Being Considered for Lafayette
- May 13 – Budget: Antioch City Staff Says Council Has A Spending Problem
- April 22 – $14.1 Million Deficit, San Ramon Set to Discuss Budget Cuts
