New Vallejo council seeks fiscal accountability and transparency in runup to mid-year budget

VALLEJO – Vallejo’s new City Council took steps to demonstrate their stated commitments to fiscal accountability and transparency during a meeting Tuesday as councilmembers prepared for the city’s mid-year budget adjustments.

In addition to taking a hard look at the city’s practice of balancing its budget with vacant staff positions, the newly-elected councilmembers scrutinized two items on the consent calendar: an authorization of $600,000 for Mare Island Causeway repairs and over $1 million in payouts that had already been made to the Vallejo Convention and Visitors Bureau.

Councilmember Tonia Lediju asked why the staff was coming to the council to approve more than a million dollars for a service agreement with the visitors bureau after the money had already been paid out. 

“I'd like to better understand how we have paid $1.1 million from July 1, 2021, through September 30, 2024, and you're requesting the council to approve those payments,” Lediju said. “Based on what I see, those payments have already been made, and that informs us that we don't have a legal contract to make those payments.”

City Finance Director Rekha Nayar said that the funds are collected through the Vallejo Tourism Business Improvement District and they pass through directly to the Vallejo Convention and Visitors Bureau. She said that the contract had expired and the city did not realize that until they began to look for quarterly financial reports from Visit Vallejo on the expenditure of the funds.

“When we started asking those questions,” Nayar said, “we realized, ‘Oh, the contract has already expired, and that's why there's no reports.’ As soon as we came to know, we did stop the payment, and we did not make any further payments knowing that there's no contract. So yes, it was an error on part of the city that we did not realize the contract had expired.”

Lediju said that her understanding is that a contract is required even with pass through funds.

“I would like for us, as a city, as a team, not to put things on the consent calendar that do not allow us to be transparent and honest,” Lediju said. “At times, we do make mistakes. We're not perfect, and it's okay to fail forward and to be honest with the community that, ‘Hey, we didn't get it right today, but we're acknowledging it, and we want you to know that this is what we need to do going forward, and you can trust us to do that.’”

Councilmember Alex Matias said that he is excited about the new projects planned by the Vallejo Convention and Visitors Bureau, however, he said that problems like the overlooked contract have come up often across city departments and that he is worried they will continue to occur given vacancies and turnover in city staff.

“What is something within the purview of this council that we could do to more meaningfully address this?” Matias asked. “Should we explore having an auditor reporting to us so that they can support all of these departments to set better controls in place?”

Lediju suggested a performance audit that would examine controls and financial procedures.

City Manager Andrew Murray said the staff has included a request for audit funding as part of the mid-year budget that will be presented at the next council meeting on Feb. 11. He added that an audit of the city’s procurement process could be especially valuable.

The council also took a closer look at a request for $600,000 for Mare Island Causeway repairs in response to comments from Mare Island resident Daniel Boone, who said that he had emailed Public Works Director Melissa Tigbao and Nayar to ask whether Mare Island special tax funds would be used to fund the Causeway repair. Mare Island property owners pay taxes for a special Community Facilities District that they have decried as unfair.

Boone said that he did not receive a response to his questions, which did not reassure him that the city is embarking on a new era of accountability and transparency. He asked the council to request this information from staff. 

City staff members confirmed that special district funds would be used for half of the Causeway repairs and the rest would come from the general fund. 

Councilmember Charles Palmares said that he would like to revisit the possibility of reducing  the taxes that Mare Islanders pay. 

Murray said that the previous council had directed staff to bring the issue back to the council in the summer of 2026 when the Mare Island Specific Plan is updated and the city has a better idea of what the island’s infrastructure and build out needs will be.

Mayor Andrea Sorce said that she would like to see the issue of Mare Island CFDs come back to city council for discussion before then.  The council approved the funding for bridge repairs with Charles Palmares, whose district includes Mare Island, as the lone “no” vote. 

The theme of transparency and accountability continued during a budget workshop in preparation for the city’s mid-year budget realignment. 

In a budget presentation, Nayar addressed the contentious issue of salary savings from the equivalent of 45 full time vacant positions across city departments. 

Nayer said that when the city creates the budget for a new fiscal year they estimate the projected salary savings for that year based on an average of the vacancy rates across all departments. 

That projected estimate is then reallocated for other purposes prior to the start of the fiscal year, said Nayer. At mid-year, the city uses the actual vacancy rates from the first six months of the fiscal year to project a more accurate estimate of salary savings for the entire year. From that mid-year estimate, they deduct the projected costs that accrue from overtime or from hiring consultants to cover the vacant positions. 

After those deductions Nayer calculated that $900,000 in salary savings will be left at the end of this fiscal year to roll over into the unassigned fund balance. 

Vice Mayor Peter Bregenzer said that he thinks it’s dangerous to balance budgets on salary savings. “I hope that when we see the proposed budget for the next year, that we are not seeing that as a common practice and that we are finding other ways to balance the budget besides salary savings,” he said. 

Lediju said Vallejo’s use of salary savings has not gone unnoticed by Gov. Gavin Newsom, apparently referring to his statements at a recent press conference about law enforcement support from the California Highway Patrol. 

“When a high level official calls a city out for balancing the budget on vacant positions, he’s sending us a message and we do need to show how we move forward in this area and begin to work toward sustainability,” Lediju said.