CHICO — With most of the attendees on the city’s payroll, the Chico City Council reviewed next year’s proposed budget and, on the whole, accepted what it saw.
Tuesday afternoon’s special session — scheduled for three hours but running 40 minutes longer — gave each department head time to explain funding requests for fiscal year 2024-25, which starts July 1. Councilors, minus absent Deepika Tandon, gave their input in advance of final approval at the June 4 meeting.
City Manager Mark Sorensen tees up the budget workshop for the Chico City Council on Tuesday, May 22, 2024, in Chico, California. (Evan Tuchinsky/Enterprise-Record)
City employees constituted a dozen of the 16 audience members at the start of the session, which marked the peak in attendance.
The session opened with welcoming remarks from City Manager Mark Sorensen and a four-minute video highlighting 2023-24. (Financial recap: $176 million in appropriations across seven departments with 410 permanent employees and 36 hourly workers.)
“That was a nice summary of all the things we’ve accomplished,” Administrative Services Director Barbara Martin said, “and we hope this proposed budget continues on that trend.”
Among the changes for the coming year, the city created two new funds in its list of around 300 — one for the Fire Victim Trust settlement, one for permanent local housing allocations — and adjusted a half-dozen budget policies, notably employee classifications, pay scales and budget reserves.
Mayor Andrew Coolidge asked to revisit a component of the latter, allocation of surpluses to the city’s pension liability. (Current policy calls for 50% to this.) He also inquired about police staffing as well as the revenue guarantee fund to land a passenger airline at the Chico Regional Airport.
Councilor Dale Bennett broached using Measure H funds for housing, but after February 2025, and allotting $200,000 for additional maintenance in Lindo Channel. Councilor Addison Winslow suggested paving the housing section of the Genesis shelter site and adding shade trees and an indoor eating area.
After the presentations, the lone citizen remaining opted not to comment. That left the list of councilor questions for staff to incorporate at the June 4 meeting.
Overview
The proposed budget anticipates a 17.4% decrease in revenues to $91.3 million and, including capital improvement projects, a 19.2% increase in expenditures to $117.8 million. Per usual, public safety composes the largest portion of operating expenses at $60 million between police and fire, followed by Public Works at $40 million.
Across all departments, the city will add 19 positions.
Whether the budget balances or has a deficit depends on accounting interpretations. Including a decline of $11.6 million from other funding sources, the city’s cash balance will shrink from $35.7 million to $4.6 million by the end of next fiscal year.
Much of this stems from timing — a lag between when the city receives money, such as $21.1 million from the Fire Victims Trust, and associated expenditures, such as projects those monies defray. Sorensen called the difference a “distortion” as opposed to a deficit.
The city manager also noted calculations assume hiring all positions in the budget; “it would change our trajectory if we lose Measure H” due to a state measure on the November ballot related to local taxes. Martin said some positions currently are deemed one-time allocations versus ongoing expenses.
Projections for the following three years indicate slight upticks in the cash balance. The analysis came ahead of last week’s release of sales-tax figures showing an 8% decrease year over year in fourth quarter 2023. The total year dip was 5%; Martin said the 2024 projection is a 7% drop.
“It’s been a bit of a challenge following sales tax,” she noted, given economic volatility over since the Camp Fire and the pandemic. Sales tax represents the city’s largest chunk of revenue.
The city’s emergency reserve stands at $11.7 million for this year and $12.3 million next year.
Specifics
After nearly an hour, Martin teed off presentations in which each department head detailed goals, duties, staffing requests and budget amounts.
Administrative Services requested three new positions to a department of 31 and a $5.3 allocation. City Clerk Debbie Presson needed no additional staff beyond her department’s four full-timers and one employee shared with the city manager’s office; she asked for $2.4 million.
Sorensen likewise sought no new personnel for his “small but mighty” department of three plus the shared position. Chelsea Phebus, director of Human Resources and Risk Management, planned to hold steady with a seven-person staff; she requested $5.8 million.
After a break, Chico Fire Chief Steve Standridge thanked councilors for his department growing “incrementally more sustainable.” the Fire Department currently has 68 employees, “and we did not add any” for ’24-25; his budget request was $19 million, and he asked for two new fire engines and to complete upgrades to the station alerting system.
Chico Police Chief Billy Aldridge, noting the “buildout” of the Chico Police Department, said he’s finally in position to backfill necessary programs such as traffic enforcement. Initiatives he’s pursuing are a new evidence/property management system, expanded automatic license plate reading and planning for a new headquarters that’s years down the road.
“With growth in the department comes growth in the budget,” Aldridge said, along with “inflation growth.” He requested $41.2 million and six employees to the current 193.18 (including hourly employees in Animal Control). Three are officers, bringing sworn personnel to 112; in response to council questions, the chief called the request “responsible” and said he currently has no officer vacancies.
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The Police Department also sought seven vehicles, including four for patrol; 10 service firearms, and initial funding for a new evidence freezer and replacing robotic devices down the road.
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Community Development Director Brendan Vieg split his presentation to each division under his umbrella: the eight-employee Planning Division ($2.7 million request), 16-employee Building Division ($3.2 million), three-employee Housing Division ($550,000), two-employee Geographic Information Systems Division ($375,000) and five-employee Code Enforcement ($803,000). He asked for two promotions and one new position, for a building inspector.
Public Works already has a bifurcated structure, with Operations and Maintenance a separate division from Engineering. For the former, O&M Director Erik Gustafson highlighted infrastructure, airport and park improvements in requesting eight new positions and $31.3 million. The division currently employs 103.
Public Works Engineering Director Brendan Ottoboni referred to his group of 38 as “lean and mean, and we get stuff done,” noting “a record year” with $60 million in construction contracts awarded in ’23-24. Noting 13 vacancies from last spring dropped to four now, he asked for no new staff in a $8.7 million allocation that includes contracting with consultants.
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