Redwood City weighs an extra $17.1M

“We’re projecting deficits because we’re paying $28 million a year in pension costs and we’ll be going up to $42 million a year in the next 10 years,” he said. 

Per a policy adopted by the City Council earlier this year, 80% of any year-end operating balance, which in this case comes out to $13.7 million, is spent on the city’s pension liability, with the other 20% going to council priorities, including housing, transportation and children and youth programs. 

The surplus is due to stronger than expected revenue and lower than usual spending. During the first six months of fiscal year 2018-2019, the city intentionally left vacant positions open and also spent conservatively while awaiting the results of the November 2018 sales tax revenue measure, according to a staff report.

“This was to avoid potential layoffs and citywide service impacts beginning in January 2020 if the measure was unsuccessful,” the report states. Those vacant positions are steadily being filled since the passage of the sales tax hike, which so far has generated an additional $2.4 million. 

Meanwhile, revenue from property, sales and hotel taxes are higher than expected this fiscal year, and the city also received $5.4 million in educational revenue augmentation fund (ERAF) refunds from the county, which is not a funding source that can be counted on in the future, officials say.    

“This level of funding is higher than can be expected in the future due to the accelerated timing of payments, and recent and potential changes in school financing, which the county controller has indicated could significantly reduce this revenue source in future fiscal years,” according to the city’s comprehensive annual financial report.

With 80% of the city’s surplus going to pensions, 20% comes out to $3.4 million. That will be spent on city priorities, including new efforts to support homelessness and its impacts.

About $150,000 in surplus money has been allocated for what’s called the Healthy Streets Initiative. As part of the initiative, staff is working on a plan to facilitate safe dumping of sewage and trash from homeless camps and RVs, with money being spent potentially on dumping vouchers, protective equipment for cleaning crews and a trailer that will be used to haul trash. 

Khojikian said residents can expect more frequent cleaning efforts moving forward in areas frequented by RVs and homeless camps. This week, crews cleaned Stafford Street, which has been a popular destination for RVs of late.

“It’s an incremental step in the process,” Khojikian said. “We’re trying to work through public safety and environmental safety — those are top of mind issues we need to take care of first and foremost while we look at longer term solutions.” 

The long-term plan includes a safe parking program that will be considered by the council in the spring of next year. An ad-hoc committee comprised of councilwomen Giselle Hale and Diana Reddy continues to explore potential safe parking programs and $50,000 in surplus money has been set aside to fund any short-term measures that the committee comes up with.

zachary@smdailyjournal.com

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