The Santa Clara City Council approved the annual budget, even though given the City’s spending trajectory, it will be operating in a deficit in the next five years.
Although this year’s $728.9 million budget is balanced, City employee pensions and major infrastructure improvements are the major drivers of the expected deficit.
City Manager Rajeev Batra said the City is able to maintain its capital reserve–set aside in case of emergencies–but the $127 million for capital improvements it is to spend will be spread out over 226 active projects. However, over the next few years, the City will have only enough money for basic maintenance instead of continuing to fund much-needed infrastructure improvements.
Angie Kraetsch, director of finance, said if the City cannot find a way to add more money to the capital improvement plan reserve, it will slowly decrease.
“It is a zero-sum game,” Batra said. “If you are adding things you are taking from something else.”
This year’s budget saw an increase of 9 percent in overall spending by the City, including the addition of 27 new full-time positions. Among those positions were eight police officers and eight people working in the community development department (something many Santa Clara residents pushed hard for).
To address the looming deficit, which will likely be nearly $40 million by 2022, Batra said the Council should consider some more “innovative solutions.” Some ideas he and his employees came up with included imposing an infrastructure fee, putting term limits on City employees, and begin the budgeting process earlier and farther out.
“We want to do everything, but doing everything means you have to add staff,” he said. “We need to continue to think in terms of how we think to balance.”
Vice Mayor Dominic Caserta said he favored many of the ideas Batra suggested, calling them “forward thinking.” However, he opposed the notion that working for the City government be temporary, saying such a policy would contribute to the “WalMart-ization” of the City.
The Council unanimously approved the budget with provisions–at the behest of Mayor Lisa Gillmor–for the City manager to return with costs on double-paned windows for the Mission Library overhaul and increasing community outreach. Gillmor said she would like to see weekly newsletters, surveys and polls of residents, and weekly town hall meetings.
“We are going to have to put some resources into this to show we are serious,” she said.
The Council also heard an update on the Santa Clara Convention and Visitors Bureau.
Lisa Moreno, general manager of the convention center, told the Council that the convention center is looking into how to increase traffic into Santa Clara during times typically slow for the hospitality industry.
By increased marketing and tracking metrics, Moreno said the employees at the convention center will be able to gain more sophisticated data about potential customers, such as how many people who view websites associated with the convention center are booking hotels in Santa Clara. Moreno said the convention center has been operating in the black for the past several years, because although its primary goal is to drive commerce into the City, she said she has always tried to run the center like a business.
Other items up for discussion surrounded 11 items pulled from the consent calendar for discussion. Among those was the sale of the Santa Clara Hilton parcel property located at 4949 Great America Parkway. The Council approved the sale of the nearly 4-acre lot to its current occupant Ontario Airport Hotel Corporation.
The $24,250,000 sale comes as part of an ongoing loss to the City’s property portfolio since California voters dissolved redevelopment agencies, made up of local governments empowered to capture a larger sum of property taxes in order to combat urban blight.
The City will collect 10 percent of the sale.
Gillmor called the sale “heartbreaking.”
“This is a bitter pill to swallow,” she said.
Gillmor also removed three contracts for City services–for trimming trees posing a threat to power lines, for informational technology assessment and code enforcement–from the consent calendar, and the Council voted unanimously to continue discussion of those contracts at its next meeting.
The City Council will meet again 7 p.m. June 27 at City Hall, 1500 Warburton Ave. in Santa Clara.
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