Rome is burning. If the city council majority of Mayor Karla Brown and Councilmembers Valerie Arkin, Jeff Nibert and Julie Testa have their way, we might not have the people or the water pressure to put out the fire.
At a special meeting April 18, which preceded the regular council meeting, the council discussed the proposed two-year budget and four-year capital improvement plan (CIP).
If the majority rams these spending plans through like they did the election district map last year (minus Nibert) little discussion, dismissal of staff and colleagues' concerns, and a rush to vote Pleasanton residents will very likely be negatively impacted, especially in the pocketbook.
Some residents might find a trickle of water coming out of their faucet periodically during summer months. We might not be able to afford to hire police officers or firefighters for the current vacant positions without sending the budget into a deficit. But we'll have a brand-new expanded skate park and completely renovated historical building.
Staff presented a balanced budget for fiscal year 2023-24, but it's balanced because it banks on future staffing vacancies to create roughly $2 million in labor cost savings that allows the general fund to squeak into surplus. The savings is estimated based on historical staffing shortages over the past two years. Only by using this technique does the proposed budget achieve a whopping $1,829 surplus. If the positions are filled, the city's in the red by nearly $2 million.
The unfilled positions include police officers, firefighters and others who provide services to residents the same open positions the majority used as an excuse to trash the Lions Wayside and Delucchi Park Master Plan that was decades in the making and eliminate support for Leadership Pleasanton.
This is the first time in recent memory this tactic has been used. The city has historically expected to fill all vacant positions and budget for them. However, if the positions were still unfilled at the mid-year review or the end of the fiscal year, the funds would be unspent and therefore put back into the budget, resulting in a true surplus.
Let me point out that city staff takes its orders from the City Council, and the city has always been on solid financial footing without using this tactic. Until now.
In addition to an estimated 10% annual increase in the cost of staff benefits, increased unfunded pension liability because of the dismal performance in the investment market, and current labor negotiations, the city has urgent infrastructure needs including repairing damage from the recent storms "forever" chemicals in the water resulting in wells taken offline and all the other expenses that just keep increasing.
The situation with water is by far the most troubling, and the "mission critical" message appears to not be getting through to the council majority.
Three wells that produced about 20% of the city's water are contaminated by per- and polyfluoroalkyl substances (PFAS), and are offline, forcing the city to rely solely on water purchased from Zone 7.
As part of its pricing, Zone 7 charges the city a flat fee, regardless of how much or how little water is used. The city, on the other hand, charges residents based on usage. The mandatory 15% drought reduction meant less money going to the city coffers, but Zone 7's fees did not decrease.
The water enterprise fund reserve should be at 30% of operating expenditures; it's currently at 23% because it's been dipped into to cover operating expenditures. Staff reported that the budget includes a transfer from the water capital fund into the water operations fund to slow the decrease; however, if the trend continues at the current rate even with the infusion of money from the capital fund it will be depleted by the end of 2024 without some intervention, possibly a loan from the general fund. They plan to raise rates before then.
The drought is over, and with it the drought surcharge and the 15% mandatory reduction in usage. However, because of "infrastructure limitations," a voluntary 15% reduction in usage was to be discussed, but was continued until May 16 by staff.
Simply put, Zone 7 can supply the water, but the turnouts, pumps and pipes that transport the water into the Pleasanton system are fixed in size. Without Pleasntons wells, those pipes may not be able to handle the additional flow during summer peak periods, which affects water pressure.
According to the staff report on the now continued agenda item, if water demands exceed the capacity of five of the seven turnouts, "large portions of the water system would likely no longer be able to provide consistent and reliable service to customers. Specifically, this could include low or zero water pressure, empty reservoirs, and loss of water flow for firefighting."
It continues, "Also associated with low or loss of system pressure is the potential for contamination of the water distribution system a properly pressurized water system is very effective at keeping contaminants out of the water supply; loss of system pressure could likely result in water quality concerns."
The staff report stated that a study was done and found that the "turnouts cannot meet demand experienced prior to drought conditions," when there was not a 15% mandatory reduction.
It's a lose-lose proposition. If everyone reduces usage, the city loses revenue. If nobody reduces usage, residents could lose water pressure during times of high demand.
A plan to treat and rehabilitate the PFAS-contaminated wells and create a new centralized facility for PFAS treatment, disinfection and fluoridation was put on hold in September. One reason was the cost, which was estimated at $46 million, and another was that the treatment facility would require additional staff and operational costs.
If council chooses not to restart this plan or determine an alternative, 100% of water in Pleasanton will be supplied by Zone 7 and the city will lose control of its water supply. When all municipalities and agencies including Zone 7 are looking to diversify their water supply, Pleasanton would be going in the opposite direction. And the aforementioned turnouts, pumps and pipes will need to be replaced.
Regardless of which path is chosen, there will be increased costs.
There appears to be no wiggle room if expenditures come in higher than expected or revenue falls short of projections. When inflation is high like it is now, people are being laid off, and they, like many households, tend to not make unnecessary purchases, which could affect sales tax revenue.
And, speaking of unnecessary purchases, why does balancing a budget on planned staffing vacancies include unnecessary items like a $6 million skate park and $4.6 million to renovate a historic home inside and out?
The city needs to have good reserves in place and the financial stability to be able to borrow money at favorable terms. Rather, we have underfunded reserves and a budget balanced on what I consider shaky ground.
City Manager Gerry Beaudin said at the meeting, "We're not there right now ... We wouldn't be the most competitive borrowers out there right now."
The word "conservative" was thrown around by Mayor Brown. This is not a conservative budget.
Why isn't providing clean water with enough pressure to put out a fire the priority for this council majority?
Like Nero, the council majority is fiddling paying off grudges with the chamber, trashing desired projects without getting solid estimates, justifying their pet projects, etc., etc. while Rome is burning.
I encourage you to make them aware just how important water is prior to and during the City Council budget meeting on May 16.
Editor's note: Gina Channell Wilcox has been the president and publisher of Embarcadero Medias East Bay Division since 2006. Her column reflects her opinion and is not a news report. It is factually accurate but is an opinion piece, and an opinion is a bias. It is important to look at the reasons behind this opinion to form your own opinion.