Pedestrians pass through the seawall lining Beach Road in Belvedere on March 21, 2022. (Alan Depp/Marine Independent Journal)
Belvedere's increased fire costs in next year's proposed budget are causing concern among the city's finance committee.
The committee considered a $9 million budget proposal Tuesday. The proposed 2024-2025 budget projects a general fund shortfall of $1.2 million by the end of June 2025.
City officials said there could be a slight increase in revenue, but a slight increase in spending, especially for the city's fire service contracts.
General fund receipts are expected to be $9.1 million, but city expenses and external contributions will bring the total to $10.3 million, a 5.8 percent increase over this year's budget. Transfers to various funds include his $300,000 to a pension trust and his $650,000 to critical infrastructure.
Administrative Services Director Helga Kotter said the current fiscal year is expected to end with a $1.4 million surplus to cover the deficit.
“It is also important to note that some of these transfers are not related to current year expenses,” Cotter said. “In particular, the transfer of the Critical Infrastructure Reserve and 115 Pension Trust Funds will be made to fund anticipated future expenses and allow for budget smoothing.”
According to the proposed budget, most of the city's revenue will go towards costs related to fire and police services and the public works department. Approximately $1.1 million is planned for capital projects, including seawall and retaining wall projects.
City Administrator Robert Zadnik said the retaining wall along Beach Road is of particular concern and a top priority. In the proposed budget, he has $175,500 set aside for this project. But Zadnik said current solutions proposed by engineering experts do not address seismic concerns.
“This is nothing new and surprising to us,” Zadnik said. “We knew through the commission that protects the Belvedere sea walls, levees and public facilities that this was a vulnerability and a threat.”
The majority of the city's revenue, 71%, comes from property taxes. Cotter said property tax projections show a potential increase of 5%, or the equivalent of $358,000, in the budget year, while general fund revenues could increase by 2%, or approximately $177,000. He said that there is a sex. The proposed budget does not include any grants, but Cotter said the city will continue to look for grant opportunities.
The significant change in costs was a 7.5% increase in the Tiburon Fire Protection District contract. The Fire Department has deferred some of its annual Section 115 contributions, a trust account required to fund employee benefits, to keep costs to the city roughly constant. Without this, the budget increase would have been approximately 14%. Still, the city expects to pay the district more than $92,500 and plans to make additional payments in the future.
Currently, the fire services contract is approximately $2.1 million, which is expected to increase to $2.4 million in the next budget cycle.
Sally Wilkinson, a non-voting City Council member on the committee, said fire costs have increased by about 6% each year for the past 20 years, while city spending has increased by 4.4%. . She suggested closely analyzing long-term trends in costs over the past few years and projected future cost increases.
“I think it would be helpful just to hand out some numbers and some graphs to give a clearer picture of where it's gone. And as you say, when does that crisis really come?” I think it's useful to project out 20 years to see what happens,” Wilkinson said.
Other costs include a one-time payment of $125,000 for Martha's property, a 3% adjustment of city employee salaries to cost of living for the budget year, and legal costs for the housing component.
Capital improvement expenditures include projects throughout Belvedere, such as road maintenance such as pavement repairs, sealing cracks and traffic signs. Emergency preparedness work such as reducing vegetation and firefighting fuel throughout the city. and technology upgrades.
Cotter said the city plans to pay about $250,000 in pension-related debt, but the unfunded liability payments to CalPERS are expected to increase over the next five years. The city plans to continue making debt payments of about $300,000 per year, but the budget projects that required pension contributions will increase from $195,000 in fiscal year 2025 to $415,000 in budget year 2029.
Zadnik said total pension obligations remaining at the end of this year will be $1.6 million.
Budget projections meet the city's reserve fund goals. Belvedere's policy is to cover half of its general fund expenditures plus pension obligations and fire protection costs. The reserve fund is intended to cover approximately six months' worth of operating expenses in the event of a catastrophic event. In the proposed budget, Belvedere exceeds the amount required by policy by $150,0911.
“My concern is that this budget is in the red,” said committee member John Wilton. “This is one of the few years we have had a significant loss.”
Mr Wilton said he wanted more explanation as to why the five-year outlook did not show a continuation or increase in the deficit, and asked staff to show how they planned to “turn it around”.
The City Council is scheduled to consider the budget at its May 13th meeting. A public hearing is scheduled for June 10th, and the new fiscal year begins July 1st.
