- Elizabeth Larson
- Posted On
Clearlake City Council approves $57 million budget, largest in city’s history
“It is the largest budget in the city’s history, primarily due to a lot of investment in capital projects,” said City Manager Alan Flora during an hour and a half long budget workshop that took place before the regular Thursday evening meeting, during which the council and staff looked over the final budget numbers.
“This is an historic budget,” Mayor Dirk Slooten said during the council meeting that followed.
The 2021-22 fiscal year budget includes $57.4 million in expenditures, $53.6 million in revenue and a general fund of just under $8 million.
Much of that influx of revenue — nearly three times the $18 million the city had budgeted for 2020-21 — is the result of grants and settlements that are flowing into the city’s coffers, Flora said in his report.
One of the key areas of focus for spending in the coming fiscal year will be infrastructure — including 15 miles of road work — which Slooten said is badly needed.
The 2021-22 budget calls for capital projects totaling $36 million. The funds to cover that spending include $14 million in settlement proceeds from litigation and nearly $14 million in Community Development Block Grant Disaster Recovery money for two large road rehabilitation projects in and around the Sulphur Fire area.
During the budget workshop, staff noted highlights including more than $1 million going into the city’s general fund reserves, which will now total $1.625 million.
Flora said it’s a long way from five or six years ago, when the city’s reserves were zero. He said the Government Finance Officers Association recommends having reserves of 5% to 15%; Clearlake’s reserves are now just over 20% of general fund reserves.
Those reserves are an important piece of the city’s fiscal stability, Flora said.
Flora said a lot of the story about this budget is about infrastructure — which is something he acknowledged that the city hasn't done a good job of building over the years.
The coming year’s infrastructure improvements are going to have what Flora called “a dramatic impact” on the city’s ongoing discretionary revenue streams because of things like the commercial development set to take place at the city’s former Pearce Field airport site, where the infrastructure improvements are expected to break ground in the spring. Such developments bring in key revenue such as sales tax.
But preparing for those projects requires the city to be financially prepared, Flora explained
“We have to make sure that we're on a strong fiscal foundation and that reserve adjustment’s a big piece of that,” Flora said.
He also noted that he’s very optimistic about the city’s position with its developments, with retail consultants telling them the biggest problem is that the city needs more land to develop.
“Right now the retail interest is hot and we need to take advantage of it,” said Flora.
Capital project investments in the budget include more than $7 million for the airport project and $4.1 for Lakeshore Drive, Flora said.
Most of the city wasn’t developed properly in the beginning. “We’re trying to create a real city after the fact,” with amenities people expect, Flora said.
During the workshop, the council heard from Clearlake Police Chief Andrew White, who has been doing double duty as both chief and the city’s finance director, who said the police department’s greatest challenge remains recruitment and retention.
It’s not just an issue for officers; White said they are struggling to get applicants for dispatcher jobs.
They’ve also lost one of their two animal control officers and are about to lose the second, so they are considering contracting with an outside organization for services as they have no interim coverage lined up, White said.
Another challenge for the city this year is a growth in insurance premiums.
City Clerk/Administrative Services Director Melissa Swanson said the general liability market is having instability.
That’s resulted in increases across the board, with lowered coverage and increased deductibles across many insurance pools, Swanson said.
She said the city is seeing premiums increase for general liability at a rate they haven’t seen since the 1980s, and they’re expecting more such increases in the 2022-23 fiscal year.
After having the extensive discussion of the budget during the workshop, the council item to approve the budgeting during the meeting that followed was brief.
Councilman Russ Cremer moved to approve the budget, with Councilman David Claffey seconding and the council voting 4-0. Councilman Russ Perdock was absent.
Slooten offered his thanks to staff for their work on the new budget.
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