After Cuts, Pittsburg Approves Operating Budget With Small Deficit

On Monday, the Pittsburg City Council approved its 2024-2025 operating budget which will run at a $593k budget gap.

According to City Manager Garrett Evans:

• $61.3 million in general fund revenue
• $61.463 million in expenses
• Other funding requirements
• Deficit of $593k

Originally, Pittsburg was nearing a $8 million deficit, but reduced it to an estimated $3.6 million before working over the month of May to make more cuts in an effort to get within a 1% of a balanced budget to close the budget gap — the city has also stated its looking at a half-cent increase to local sales tax will generate between $5.5 and $6.5 million annually for road projects.

“You can see, quite a bit has been trimmed out of what was in the first budget workshop in May, to a deficit of $170k,” said Evans who added they still have some work to do. (Summary)

Pittsburg residents will see a cut in landscaping services as the budget cut $756k, while they also cut $106k for festivals and events.  City/Staff will also see less travel/training & conferences with a cut of $93k.

Cuts by department include:

• Pittsburg Police – $959k
• Recreation – $210k
• Public Works – $154k
• City Attorney – $138k
• Finance – $84k
• HR – $84k
• City Manager – $73k
• Permit Center – $27k
• Planning – $20k

The budget was approved in a 3-0 vote (Dionne Adams, Juan Banales, Jelani Killings) with no public comment or discussion by the council.

Evans provided a list of budget cuts they have proposed which he explained a lot of little cuts added up to approximately $4.2 million:

Budget Tidbits:

• The City anticipates property tax revenues to increase modestly in FY 2024/25 by $$180,545, approximately 48% of which is due to increases in secured property, with the other 52% due to increases in supplemental taxes.
• For FY 2024/25, sales tax revenue projections have decreased significantly compared to the FY 2023/24 year-end estimates, a 6.56 percent decrease. This is in line with sales tax trends throughout the Bay Area and reflects the loss of several Pittsburg businesses. Staff anticipates sales taxes to grow very slowly over the course of the next several years
• The Budget Stabilization Fund projected balance at the end of FY 2024/25 is over the lesser of $2 million dollars or five percent of the General Fund operating expenditures as required by the Ordinance. While the City Council adopted a change to the Fiscal Sustainability Ordinance allowing up to 10 percent of the required minimum 30 percent General Fund reserve level to be held in real estate, no expected utilization of real estate is projected for the current year to maintain the minimum requirements as outlined in the Ordinance
• General Fund projected expenditures have decreased by $7.7 million in FY 2024/25 over FY 2023/24, primarily due to additional appropriation of General Fund reserves for various City Council approved projects in FY 2023/24.
• Other increases are related to scheduled salary increases as well as increasing fringe benefits, such as pension and medical costs. This budget continues to see additional resources dedicated to fund the City’s pension obligation, with higher contribution rates and additional funding requirements to cover the unfunded actuarial liabilities (UAL) and changes initiated by the California Public Employees’ Retirement System (CalPERS) Board. These increases are the result of changes in CalPERS policies to proactively fund the current UAL over the next 15 years.

Related:

• June 4 – Pittsburg Budget Shows $3.6 Million Deficit, 13% Loss in Sales Tax
• May 25 – Pittsburg Considering Sales Tax Increase on November Ballot