City budget is in the black. Where will the money go?
As many cities flounder with debt and bankruptcy, Claremont’s reserves are getting deeper with an eye kept on the pending water ownership issue.
The Claremont City Council allocated $1.8 million in surplus monies to various city reserve funds Tuesday night. Included in the distribution was the establishment of an account for the city’s potential water acquisition.
Council unanimously supported placing $300,000 of this money in the water acquisition reserve fund, which will require council approval before use. Pleased with the decision, councilmembers believe the move reaffirms their commitment to an established council priority to purchase the city’s water system.
“It’s really putting our money where our emphasis is,” said Councilmember Sam Pedroza. “It’s showing we are serious about this.”
The nearly $2 million in excess fees comes from an unexpected surplus in property and sales taxes and transient and hotel occupancy taxes as well as from development permit fees, according to Finance Director Adam Pirrie. Property tax exceeded estimates by $160,000, “as a result of better-than-expected increases in the assessed value of real property within the city,” said Mr. Pirrie, and sales revenues exceeded estimates by about $656,000 because the city “originally budgeted very conservatively in recognition of the volatility we experienced in 2008-2009 and 2009-2010.”
“A lot of the revenue gains resulted from a rebound in auto sales as well as the addition of several new restaurants and retail establishments within the city,” Mr. Pirrie explained further. Transient Occupancy Tax revenues, exceeding the budgeted amount by $126,000, reflect a rebound in the economy and hotel occupancy while permit fees increased primarily due to heightened development activity at the colleges.
The additional $1.5 million surplus will in part benefit the Operating and Environmental Emergency Reserve, which will receive $500,340, the Maintenance of Operations Reserve will receive $334,000, CalPERS will get $334,000 for unfunded liability on the city’s miscellaneous plan and the Equipment and Facility Revolving Reserve will receive $334,000.
Though pleased with the news, Mayor Pro Tem Opanyi Nasiali cautioned about getting too excited about the surplus.
“While this is good news…I think we still need to be careful in how we do our expenditures so we don’t spend money just because we think we are getting enough,” Mr. Nasiali said.
The council was in agreement over allocating the excess funds into reserves, but not all were on the same page with how money in the newly established Equipment and Facility Revolving Reserve should be spent. The council approved the account in May with the sole purpose of handling needed maintenance or repairs for city facilities and equipment. With the reserve account established, the Community and Human Services identified 6 areas in need of such fixes over the past few months. Identified needs include new bleachers at College and Blaisdell parks, 50 new barricades for use during city events, new furniture and facility improvements—including a new 70-inch TV—at the Youth Activity and Teen Activity Centers (known as YAC and TAC, respectively), and new furniture and refurbished flooring in the Foothill Room at the Hughes Community Center.
While the council approved using $109,725 of the designated Equipment and Facility Revolving Reserve for these upgrades, Mayor Pro Temp Opanyi Nasiali and Councilmember Corey Calaycay were wary of the decision to buy a new 70-inch TV to replace the YAC’s 55-inch set.
“There are some things here that are very clearly needed from a liability standpoint: the patio, the bleachers,” Mr. Calaycay said. “Other things I view as a little more luxurious. When you’ve got choices to make in difficult times, sometimes a TV takes a backseat to that.”
But Councilmember Sam Pedroza was of a different mind, pointing out that the money in that reserve was specifically designated to help fund the upgrades as facility managers saw fit.
“This is what the reserve was created for,” he said. “We are extremely fortunate as a city to be in a position to be able to, first of all, have a reserve and, second of all, to be able to then replace and do what the reserve was set up to do, which was to fix some of the equipment issues that we have.”
In disagreement about the TV but in support of the other fixes, Mr. Nasiali suggested the purchase of the new TV be voted on separately. The council voted 3-2 to purchase the TV, with Mr. Nasiali and Mr. Calaycay opposing. The rest of the upgrades were supported unanimously.
“We provide a plethora of services to the community, young to old…and you have to balance that out,” Mayor Larry Schroeder noted. “We have to consider the age of some of this equipment and the needs of the youth and ability to have young people go to a place that is safe and keeps them occupied.”