Vallejo council postpones Mare Island tax relief amid budget shortfalls, staffing crisis

VALLEJO – The Vallejo City Council postponed any action to provide tax relief to Mare Island property owners on Tuesday as city staff said that the upcoming city budget was hampered by a $2.4 million revenue shortfall that was only filled because the city has struggled to hire for numerous vacant positions.

During Tuesday’s budget workshop meeting – where the council got its first look at the proposed 2023-24 budget – City Manager Mike Malone said that the budget presentation does not include recommendations to reduce Mare Island’s special tax as the council had requested at the previous meeting.

“We were unable to bring something back and still maintain a balanced budget in the process,” Malone said. The council postponed any further discussion of the issue until September.

Finance director Rekha Nayer said that although the proposed budget showed a general fund revenue increase of $2.2 million, expenses had also increased by $4.6 million, creating a shortfall that was filled by accrued savings from vacant positions. Combined with the previous year, the city has used $7.1 million in savings from unfilled positions to cover budget deficits.

Councilmember Mina Loera-Diaz said that the council needs more information on how the rest of the city would be affected by a partial or full reduction of the estimated $3 million in special taxes that Mare Island residents pay annually.

As part of the budget presentation, city human resources director Stephanie Sifuentes said that the city’s staffing challenges are worsening.

“I’m sure you have heard of the Great Resignation or the Great Reshuffle – now they are calling it the public sector quiet crisis,” Sifuentes said. “Vallejo has had problems for years in terms of recruitment and retention but this is really being seen nationwide.”

In 2021, the city had 112 vacancies out of 639 authorized positions. In 2022, that number jumped to 195 vacant positions of 673. So far in 2023, the city has 190 vacant positions with 660 positions approved.

“The public sector is especially feeling the pinch because we are not as agile, we will have to get more creative in order to be competitive,” said Sifuentes.

Councilmember Charles Palmares asked whether offering more competitive salaries is part of the solution to the city’s employment woes. Sifuentes said that it is standard practice to conduct a salary study every three years and Vallejo is using adjusted numbers from a 2019 study.

Sifuentes said the number of applicants per job for municipal governments is down by 56% and 50% of the jobs posted get less than 10 applications.

The police and fire departments make up the largest portion of the proposed budget spending, accounting for nearly 70% of the $132.7 million in proposed general fund spending. Police spending is $57.8 million or 44% of the proposed general fund, which is a slight decline from the 2022-23 budget.

Police department leaders chose to freeze a vacant officer position and replace it with an administrator position that will support the implementation of the OIR recommendations so the new position will not impact overall finances.

The fire department accounts for 25% of the proposed general fund spending or $32.9 million, a $500,000 decline from the previous year. The proposed budget includes increased spending on replacement and maintenance of the fire department’s aging emergency vehicles, but these costs are offset by a decline in total salary and benefits spending from the previous year.

The proposed budget also includes $4.1 million to improve city streets. Of that, $2.5 million will go towards repairing potholes and improving streets in residential neighborhoods. The city is seeking to construct sideshow deterrents at 21 intersections, and this year pedestrian walk signals will be added to five intersections, three of which are along Springs Road.

The budgeted roadway work does not include Measure P funds, a seven-eighths-cent sales tax increase passed by voters last year. Collection of Measure P funds began in April but revenue from the measure has not yet been allocated. City staff balanced the general fund budget without including Measure P spending. The measure is expected to generate $18.1 million annually which will be part of the general fund that the council will allocate later in the year with the help of the Measure P oversight committee.

But Mayor Robert McConnell said the Measure P oversight committee has received a surprisingly low number of applicants. The city began collecting applications for the seven-member committee on May 23, and the application period closes on June 16. McConnell said that the city has only received three applications.

“Despite all the interest in that, the follow up on the willingness to serve on the committee is going to have to be developed,” McConnell said. “If we don’t have more applications it is going to be the responsibility of each councilmember and the mayor to find someone to be on that committee.”

“The Police Oversight and Accountability Commission has the same problem,” he added. The application period for this commission also opened on May 23 and closes on June 16.

The city included some funding in the proposed budget to improve the marina but not for dredging of the Mare Island channel to clear the mud and silt along the shoreline.

Several community members said that the thick mud makes parts of the channel unnavigable even for small boats. Councilmembers Peter Bregenzer and Loera-Diaz echoed community concerns about the need for dredging to improve the treasured waterfront.

McConnell said that there is work underway to form a Joint Powers Authority to purchase a dredging outfit that could be used as needed by all of the bayfront and Sacramento river delta cities, but he said that this solution will take time.