HERCULES -- Flush with Tuesday's overwhelming voter approval of a Utility User Tax hike, Hercules officials have jettisoned a standby, low-ball budget plan for the upcoming fiscal year that threatened to do away with the police department, among other painful service cuts.
On Wednesday, a trio of panels recommended that the City Council later this month adopt an updated 2013-14 draft budget plan that includes a balanced, $12.6 million general fund budget. The draft plan, presented by Hercules Finance Director Nickie Mastay at a joint meeting of the City Council Finance Subcommittee, Citizens Finance Committee and Measure O Citizens Oversight Committee -- named after a successful June 2012 ballot measure that raised the sales tax in Hercules by a half-cent on the dollar -- actually projects a tiny surplus of $545.
Measure A, which needed only a simple majority to pass, collected 70.71 percent of yes-votes Tuesday, eliminating the need to consider a "Version B" budget plan that officials said could have resulted in the city contracting with the Contra Costa Sheriff's Office for police services. It increases the Utility User Tax, currently 6 percent on gas, electric, water and telephone bills, to 8 percent, and extends it to previously untaxed cable TV bills and other unspecified video technology. Mastay said it will raise an estimated $1 million a year, including $280,000 from the 8 percent taxation of previously untaxed cable TV bills.
An earlier version of Mastay's preferred budget draft, presented to the council May 14, had projected a deficit of $251,000 for the coming fiscal year. Since then, she has reduced revenue projections by about $84,300 while reducing expenditure projections by about $335,900, for a net improvement of almost $251,600, or just more than the deficit projection of a month ago.
Adjustments to Mastay's earlier revenue projections include $53,300 less in motor vehicle registration fee funds, and $40,000 less in charges for services. Adjustments to her earlier expenditure projections include about $228,700 less for risk management, largely because of reduced insurance cost projections by $131,200 and reduced unemployment claims, by about $85,500; and $65,100 in reduced public safety expenses, mostly from an expected savings in dispatch charges.
City Manager Steve Duran said Wednesday night that the council likely will discuss Mastay's draft budget Tuesday, with final budget adoption expected at the June 25 council meeting.
Although Measure A passed easily, as did Measure O a year earlier, Hercules residents may be starting to feel tax fatigue, if the reaction of one of Measure A's champions is an indication.
"Both Measures O and A were needed for stabilization, and I fully supported them," Chris Tallerico, a member of Keep Our Police Services -- Yes on A, said Wednesday. "I won't be supporting any new taxes though, so let's get moving on business development. Increasing the sales tax base must be this council's No. 1 priority and focus."
Contact Tom Lochner at 510-262-2760. Follow him at Twitter.com/tomlochner.