Vallejo City Council to reorganize government as revenue shrinks

VALLEJO – The Vallejo City Council is expected this week to promote the city’s housing division to a full department to help with recruitment and move the code enforcement section out of the Police Department as it seeks to save money during mid-year budget adjustments.

The city council is reviewing the mid-year budget amendments at its meeting Tuesday.

City finance director Rekha Nayar told the council in a report that she anticipates that tax and program revenues will be $488,000 lower than the projections in the budget the council adopted last year.

This is largely a result of a reduction of $744,000 in projected sales tax revenue as retail sales declined across the city. The report notes that high inflation and low unemployment have led many businesses to substantially raise prices over the last several months. Other revenue sources, including hotel taxes, utility taxes, business license taxes, and vehicle license fees are expected to exceed projections, offsetting the loss of sales tax revenue.

The projections do not include anticipated revenue from Measure P, a new sales tax passed by voters in November that the city will begin collecting in April. Measure P is expected to increase the city’s general fund by $4.6 million over the last three months of the fiscal year. That revenue will be tracked separately, according to the city.

The city council will also vote whether to make some adjustments to department budgets for new programs. That includes several allocations for Vallejo police, including $22,000 for fitness and bike patrol equipment, $50,000 for updated computers, and $80,000 for an evidence storage vehicle facility.

One significant proposed change will move the code enforcement division — which deals with whether properties are properly maintained — from the police department to the planning and development services department. The code enforcement division also orders removal of homeless people from private property.

City officials said the move would save the city $14,000 in the current budget and free up a police lieutenant who currently heads the code enforcement section to take on other police duties.

In a separate action, the council is slated to vote on whether to amend the city’s municipal code to consider the city’s housing, economic development and IT divisions to be full departments. The move is mainly to make the city’s code better reflect the current functioning of the city as it hasn’t been updated in years. However, city officials say it could help recruit for a key position.

“Changing two of these divisions into departments will have little impact on them administratively,” Assistant City Manager Terrance Davis wrote in a staff report to the council. “Information Technology and Economic Development are both currently led by staff that are considered Department heads at this time.”

However, Davis said that promoting the housing manager position to a full department head could have a significant impact as the city has struggled with recruiting for the role, which has a large workload and many difficult responsibilities.

The city has sought to recruit for the position for over a year. Judy Shepard-Hall suddenly resigned from the position in 2021 after a disastrous presentation to the council regarding the city’s planned homeless navigation center project, when she revealed the project was badly delayed and over budget. The city still has not started construction on the project.

More issues with the housing division under Shepard-Hall were revealed over the following months, including that the manager of the city’s Project RoomKey program begged her for resources as trash piled up and urine and feces collected at the hotel and people died in their rooms and weren’t found for days.

Last year, city officials revealed that the U.S. Department of Housing and Urban Development had asked the city to pay back $2.6 million in housing grant funding because of “administrative errors.”

Following Shepard-Hall’s departure, then-interim Deputy City Manager Gillian Hayes took on her responsibilities, but Hayes was promoted to assistant city manager last year.

The city posted a job announcement for the housing manager position in March 2022 and is hoping that reorganizing the division will help find a qualified candidate.

“Staff believe this change would give the City the ability to review converting the Housing Manager position into a Director level position, which would increase the City's ability to recruit and retain for that position,” Davis wrote in his report. “The City has been struggling with recruitment for a new Housing Manager position for over a year, and the workload and responsibility assigned to that position may be more in line with a Director-level role.”

The Vallejo City Council meeting is scheduled to begin at 7 p.m. Tuesday inside the Vallejo City Hall Council Chambers at 555 Santa Clara St.