Thank you yet again for your support during the music festivals. Obviously there are challenges every year from traffic and noise, but please know that we all try very deeply to minimize the impacts. The number of complaints this year was at an all-time low and I am sure that is a product both of the efforts by Goldenvoice and the City — but also the remarkable understanding of our residents. We thank you for your support.
At City Hall, we move directly from Festival Season right into Budget Season. Putting together our $87 million Operating Budget, $28 million Water Enterprise Budget and our substantial multi-year Capital Budget is an all-hands-on-deck task. Our staff starts with an understanding of our City Council’s objectives, we then do our best to build budgets for efficient operations to achieve those objectives.
By mid-May, the City Manager proposes a budget for the next year (Fiscal Year 2019-20). The City Council and our Citizens Financial Advisory Commission (CFAC) hold public meetings to discuss both the City Manager’s recommendations and alternatives. By end of June, the City Council adopts the document. At that point, the staff puts together the day-to-day work plan that we follow throughout the year.
So that, in a paragraph, is how a City budget process works! Decisions over the content of the budget is much more challenging. We are not a highly resourced City, so we make every effort to make our spending count. At the same time, we have big hopes and expectations for Indio’s future. We feel that we have had a great year. A lot of things got done this year by our very able staff. This community has been blessed by the voter-approved Measure X revenues, which has made a huge difference this year in our Capital spending programs.
As we look at the upcoming year, the short-term perspective is reasonably good. Tax revenues continue a very slow increase as the population grows and new businesses arrive. By far, the most impressive of our tax increases comes from short-term rental Transient Occupancy Tax.
On the expenditure side, we operate a lean organization. If measured by “number of staff per capita,” we have one of the smallest staffing ratios among Southern California full service cities. Our cost increases are largely caused by conditions over which we have little control. Next year’s increases will relate to (a) unfunded past liability of public employee pensions, (b) increased insurance pool liability costs, and (c) increases in labor and equipment costs for our Fire Service contract with Riverside County.
Unfunded pension liability is a statewide problem. It resulted from years ofoverly expensive benefits and underperforming investments managed by the CalPERS retirement system. In recent years, benefit levels have been reduced and investment policy has been improved, but the unfunded past liability still haunts all CalPERS agencies (meaning most cities, counties, school districts and the State) during budget time. Our CalPERS costs are increasing by $900,000 this coming year.
The City’s costs for liability coverages has been affected by a very few high cost claims. While the costs are spread over a 5-year basis to moderate the cost shock, it means we have several years of cost increases in our future running at or above $500,000 per year above our costs for the previous year.
We are experiencing an increase in Fire Service costs due to labor contract increases and to what has now become annual wildfire crises. It has become increasingly urgent to fully staff and equip our departments for the critical work they perform on our behalf.
The Capital Budget focuses on physical infrastructure needs of the City. Over and above the $11 million from our local Measure X sales tax, most of our Capital Budget funding come from State and Federal sources – same as automatic entitlements and some through grant awards we actively seek.
Hopefully you have noticed that we are making very good progress on local and regional road rehabilitation, and we are making long overdue upgrades to our City’s Information Technology systems. We will also make progress this next year on plans for new or expanded Police and Fire Facilities. These are all largely Measure X projects.
We also hope to have funds or grants that allow us to upgrade park facilities. Longer term, we are facing some serious capital funding needs for very expensive bridge rehab, traffic signal replacements, storm water systems and public safety radio communications. We have our hands full finding funding for these improvements and for community beautification projects.
More on this next month. We enjoy continuing interest in private development and other economic investment in Indio, which encourages us. Most of all, we remember that nurturing a livable city is our primary objective.