HERCULES -- With a $1.2 million deficit looming for the next fiscal year, and no more one-time, stopgap funding available, the City Council will hold a special meeting Tuesday to bounce around ideas to generate revenue.
Possibilities advanced by the city staff, some new, others already floated earlier this fiscal year, include expedited sales of city-owned properties, retail development, and increases in some existing taxes as well as some new ones, among them a pot club tax.
The city faced a similar deficit in the current fiscal year, but it managed to balance the $12.65 million general fund budget by tapping into other funds: $300,000 from the Fiscal Neutrality Fund; $450,000 from the Vehicle Replacement Fund; and $450,000 from the Equipment/IT Fund.
But no such money is available from those sources in fiscal 2013-2014, according to a staff report by City Manager Steve Duran and Finance Director Nickie Mastay.
Increasing the Utility Users Tax by 2 percent from the current 6 percent to 8 percent, with voter approval, could raise an extra $800,000 a year, according to the staff report. An LED advertisement sign on city property near Interstate 80 could rake in $200,000 a year; such a sign faces opposition from a vocal group of residents, mostly in the western part of the city, who say it would ruin their view of the night sky.
Other revenue opportunities cited in the staff report include an increase in the franchise fee the city collects from its garbage hauler, Richmond Sanitary Service; a parking district and parking permits; and a tax on medical marijuana dispensaries.
Hercules' city code does not specifically address marijuana dispensaries, also known as cannabis clubs. But a 2006 ordinance that requires any business in the city to conform to both state and federal law has been widely interpreted as a de facto ban. Even so, one dispensary, Hercules Health Center, has done business in North Shore Business Park since 2010.
Also somewhat cloudy is the development status of various vacant properties, some of them city-owned. The 11.43-acre, city-owned Sycamore Crossing, currently under a purchase-and-sale contract with Safeway, is encumbered by a deed restriction that bars grocery sales on all but three acres of the property; litigation with the beneficiary of the restriction, American Stores Properties, Inc., is pending.
The so-called Parcel C midway between San Pablo Avenue and San Pablo Bay, which is under contract with DeNova Homes, is the subject of what Tuesday's closed session agenda characterizes as "potential litigation." And negotiations over the 6.37-acre Victoria Crescent tract north of Highway 4 have proceeded more slowly than anticipated; the council, by a 3-2 vote this month, extended prospective buyer City Ventures' feasibility study period to March 31.
Also on the list of possibilities is a relocation of the city's Corporation Yard to enable sale of the property it currently occupies between the Bayside and Baywood neighborhoods near the waterfront.
The city also looks forward to the development of the 6.62-acre, former Market Hall at the junction of Highway 4 and I-80, where owner McNellis Partners wants to build a retail complex.
Tuesday's council agenda also includes a proposed memorandum of understanding with the city's unrepresented and confidential employees group, and a draft $19,000 design contract with an engineering firm related to the Bay Trail and John Muir Parkway.
What: Hercules City Council meeting
Where: Hercules City Hall, Council Chambers, 111 Civic Drive
When: 6-9 p.m. Tuesday