Sentinel staff report–
After months of discussion and some controversy regarding budget issues in the City of Citrus Heights, the City Council is slated to vote on a proposed two-year budget this Thursday, with budget cuts largely falling on the Police Department.
The 108-page budget was posted on the city’s website Friday morning, as part of an agenda packet for the City Council’s upcoming April 22 meeting. The proposed budget shows a $39 million General Fund budget for the next fiscal year, followed by a $40 million budget in fiscal year 2022-23.
Highlights from the proposed budget are included below:
Police cuts. The proposed budget calls for the most significant cuts to come from the Police Department. Of the 27 full time positions cut in the city’s budget, 26 are police positions. Cuts as proposed will reduce the departments budget from its current $22.5 million budget down to $19.5 million for the next fiscal year.
The city has said cuts will be made by leaving unfilled positions vacant, rather than through layoffs. An additional seven limited or part-time positions are cut in various departments.
Revenue Neutrality. The city’s General Fund budget shows the long-awaited end to a “revenue neutrality” agreement with the County of Sacramento, which required Citrus Heights to forfeit its share of property taxes for the first 25 years, as a condition of incorporating as a city in 1997.
The agreement has long been the source of blame for the city’s budget troubles, with city officials estimating Citrus Heights will have lost out on more than $100 million in revenue over 25 years. With the agreement set to expire, the city is projecting a boost of about $6 million in revenues available, beginning in its fiscal year 2022-23 budget.
Budget balance. The budget comes close to balancing for the 2021-22 fiscal year, with a shortfall of just $77,000. The following year is projected to see a $3.7 million surplus, largely due to the city maintaining control of its property taxes for the first time. The surplus appears to go into the city’s General Fund reserves, increasing it to $9.3 million by mid-2023.
City Council salaries. Salaries for the city’s five council members will dip slightly to a combined cost of about $56,000, with combined benefits at an additional $58,000 cost annually. Each council member typically is paid between $8,000-$15,000 annually as compensation. For more, see prior Q&A: How much do Citrus Heights council members actually get paid?
Road funding. The proposed budget does not appear to include any General Fund monies allocated for road repaving, although restricted funds coming from Measure A and the gas tax are expected to continue to fund small annual residential repaving efforts. The city has said additional funding for roads of at least $7.6 million annually is needed to maintain roads at their current condition, with that number rising to more than $12 million if the city were to pursue a more proactive repaving plan.
A statement from the city manager in the proposed budget says city staff will continue to “aggressively apply for” competitive grant funds for roads and infrastructure projects, although grant funding rarely covers repaving of roads — unless connected to larger projects, like complete streets.
Salary increases. Several departments show significant increases in salaries budgeted, with the Economic Development and Communications Division showing a 62% increase in salaries, rising from $162,000 up to $263,000. It is unclear whether this is from pay increases, or possible staff re-organization. The city manager’s office was asked for clarification on this and other items in the budget in an email Friday afternoon, but The Sentinel received a reply saying more than 24 hours would be needed to respond due to the “level of detail” in the six questions asked.
Salary decreases. Several departments also show reductions in salaries, including a 36% drop in the Human Resources Department and 24% drops in both Planning and Engineering departments. The reductions may be due to the seven part-time staff cuts, but a list of part-time positions cut is not included in the budget. The city manager’s office was also asked on Friday for clarification regarding the decreases, with an answer expected next week. City Spokeswoman Nichole Baxter said previously in January that pay cuts were not being considered.
City Manager salary. The budget shows a roughly 10% drop in salaries/benefits/services/supplies under the category of city manager. It is unclear if the “salaries” total of $495,600 listed refers only to the city manager, or if additional staff in the city manager’s office are included in this total. According to the most recent year posted on publicpay.ca.gov, the city manager’s total wages in 2019 were $327,816, with an additional $83,794 paid in benefits. The city manager’s office was also asked on Friday for clarification regarding these decreases, with an answer expected next week.
Debt. The city’s $12 million line of credit is on track for being repaid in full by 2024, as originally planned. Interest payments of about $330,000 will continue for the next two years, with a $2 million payment being made in 2023 when the city’s revenue neutrality agreement with the county ends, followed by the remaining balance due in 2024.
Sales tax. Citrus Heights is heavily reliant on sales taxes as the largest source of revenue for its General Fund, making up about one third of the city’s revenue. Although sales tax took a hit during COVID-19 shutdowns, the city is projecting a rebound in the 2021-22 budget, with anticipated revenues from sales tax being $13.2 million — up from $11.1 million projected for the current fiscal year.
What about federal relief funding?
The city’s proposed budget does not include federal funding from the American Rescue Plan, although Citrus Heights is anticipated to receive just under $16 million — half of which is on track to be received by May 11, according to Congressman Ami Bera.
Related: Citrus Heights to receive estimated $15.9M in federal COVID relief funds
According to a statement included in the proposed budget from City Manager Christopher Boyd, the city’s plan is to return to the council for updates to the budget once more information is known about how the federal money can be used.
“We know that the Federal relief funds will not be able to address all of our City’s concerns, as they will come with specific spending guidelines,” wrote Boyd. “At this time, we are still waiting for clarification regarding the amount of funding the City will receive and the guidelines on permitted use of those funds. Once that information is available, we will return to the City Council for discussion of possible amendments to this two-year budget.”
A separate five-year Capital Improvement Program is slated to be presented to the council for adoption next month, totaling $56.6 million.
The city’s proposed budget can be viewed in its entirety in the council’s April 22 agenda packet, beginning at page 322. Public comments for Thursday’s meeting can be submitted to cityclerk@citrusheights.net, with up to 250 words. Those interested in joining the council meeting via Zoom can find links posted in the council’s agenda packet. (click here)
Additional information about the proposed budget, and responses from the city manager’s office, will be included in The Sentinel’s upcoming Midweek Edition on April 22.
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