Calistoga is flush with a $5.5 million general fund balance, which is significantly more than it had even a few years ago. However, staff is recommending $4.2 million in capital projects, some of which will be funded by grants.
Officials discussed the city’s budget for the fiscal year 2019-2020 at a May 9 workshop, following recommendations by staff to the city council in February.
Staff reported the city’s financial outlook for the coming year remains stable, but the budget is tight. General fund revenues are at $11.6 million including transfers in of $500,000 to offset the cost of city overhead support.
However, the general fund is projected to decrease by $182,000, or 1.5 percent, excluding transfers in, from the previous year.
“The gas tank is empty. We need to borrow or get creative to fund improvements beyond what’s programmed,” said Mike Kirn, acting city manager.
The adjusted budget will be brought back before the council in June for approval.
A top priority for the city is the replacement of old water and sewer lines, Kirn emphasized.
Additionally, the Palisades lift station liner failed and needs to be replaced at a cost of about $600,000. Public Works has recommended $1.1 million worth of projects. The city is in line for $700,000 in grant funding, which would go toward these projects.
Other projects include $1.4 million in road repairs and $400,000 for improvements to the Oat Hill Mine Trail entry way, to be funded by the general fund and Measure T road taxes.
Staff also recommended paying $1 million to CalPERS by the end of the month, to save on the 7 percent interest it is currently paying for employee retirement benefits. The council passed the recommendation unanimously.
“While it’s regrettable we have to do it,” said Council Member Gary Kraus.
The 10-year-old city pool also needs infrastructure work including $250,000 for pipe and pump replacement and another $160,000 for a deck. There is also desire for a shade structure given the total exposure of the pool.
Staff also recommended raises for part-time firefighters, as their current rate of pay is $14 per hour.
The three main sources of revenue for the city include hotel tax (transient occupancy tax) at 54 percent, and property and sales taxes.
The city is also anticipating development impact fees from the Four Seasons resort totaling $930,000.
While Kirn said that the city needs about twice as much in reserves as it currently has, Mayor Chris Canning pointed out that not long ago the city was operating with very little in the general fund.
“There has been a lot of sacrifice from staff and the community and hard decisions made. This city has come a very long way,” he said.