Vallejo City Council dips into reserves to fund police station development, downtown projects

VALLEJO – The Vallejo city council unanimously approved the city’s 2023-24 budget on Tuesday with the amendment that $650,000 in additional project funding will be drawn from the reserve balance rather than drawing from new sales tax revenue generated by Measure P, which are dedicated for specific uses.

“I won’t support taking from Measure P,” Councilmember Mina Loera-Diaz said at Tuesday’s meeting. “Let’s use it for what it was intended – we already lose trust from residents right and left, this is one more reason to be attacked.”

Councilmember Peter Bregenzer, who posed the possibility of using Measure P funds for a preliminary design to rebuild the police headquarters at 111 Amador St. during the June 13 budget workshop, said that he could no longer support that proposal.

“I have major concerns with using the Measure P funding for the police headquarters.” Bregenzer said. “After I have read through more of the documents, that is not what that funding was really intended for, so I would propose that we figure out a way to use reserves.”

Measure P is a seven-eighths-cent sales tax ordinance that was passed by voters in November. The text of the ordinance states that the funds are to be used to “maintain city services, including repairing, repaving and maintaining deteriorating local roads, improving city buildings, addressing homelessness, fire protection and youth services and general government use.”

The council is also required to create an oversight committee for use of the funds. According to City Manager Mike Malone, the city has not received any application from council districts 1 and 6 for the committee, so the city extended the application deadlines for it and the Police Oversight and Accountability Commission.

At the June 13  budget workshop, the council had asked staff to provide information on options to amend the budget to include funding for downtown projects, full funding for an initial design of the police station, funding for dredging the marina and options to reduce the additional taxes that Mare Islanders pay through community finance districts.  

At Tuesday’s meeting, the council voted to fund the police station design and the downtown projects, but elected not to fund the dredging or reduce taxes for Mare Island property owners.

The additional $600,000 that the council approved for the new police station will allow the city to fully fund the first phase of design work needed for rebuilding the station at 111 Amador St. According to Assistant City Manager Terrance Davis, the design work progresses in three phases: from an initial 35% design, to 65% and then to 95%. The initial 35% design will cost $1.65 million, $1.05 million of which was already included in the original proposed 2023-24 budget.  

Davis said that the 35% design can be completed by the project’s architects before January. He estimates that the full design can be completed in 18 months at a total cost of $4.6 million. Staff estimated that it would take 4.5 years to rebuild the station at 111 Amador with cost estimates at $121 million. The full project is not yet funded but councilmembers have floated the idea of issuing bonds to pay for the project.

But city Finance Director Rekha Nayar said the city’s credit rating and its standing in bond markets could be affected by the city’s track record in maintaining an adequate reserve fund. Nayer warned that the proposed draws on the reserve fund would bring the city below the recommended limits in five-year projections.

Loera-Diaz said that she would like staff to protect the city’s ability to issue bonds but she feels that the city will be able to replenish the fund balance, possibly by the mid-year budget process.

“Between bonds or grants or anything else we can get our hands on we should be able to not dive into, basically misleading the public by taking from Measure P,” Loera-Diaz said.

The councilmembers also approved $20,000 for the Vallejo Naval & Historical Museum and $30,000 for the Vallejo Main Street organization to produce quarterly events downtown.

As requested by council, city staff presented an option to provide Mare Island property owners with tax relief. According to Nayar, the only viable option to cut the $2 million needed to provide the tax relief would require eliminating two police department positions, five fire department positions, and two public works positions. Nayar said that because staff already balanced the budget with vacancy savings, the positions that would have to be eliminated for the cuts are not vacant positions but actual employees that would have to be let go.

Councilmembers were not willing to support cutting any public safety positions but the council approved a motion by Loera-Diaz directing staff to continue meeting with the residents, to include the Mare Island Company – which recently purchased 157 acres from the city for development – and to return to the council in September with “more than just one option” to reduce the burden of the special tax on Mare Island residents.

The council voted against dredging the sandbar at the entrance to the marina at a cost of $500,000, deciding to revisit the item in September once staff can determine if any American Rescue Plan Act funds are available for the project.