■ Biennial document calls for temporary drop below 20% reserve

Benicia City Council will vote Tuesday on the proposed two-year “status quo” municipal budget that would become effective July 1.

At previous meetings, the panel has heard staff presentations on the General Fund, the city’s operating account that takes up about half the budget, and the city’s special funds.

The last quarter of the budget covers departmental finances and staffing levels, Finance Director Karin Schnaider and Assistant City Manager Anne Cardwell wrote in a joint report.

“With the adoption of (the) biennial budget for the city of Benicia, the City Council also adopts the investment policy and the fee schedule for Fiscal Year 2015-2016,” they wrote.

No changes in those documents are proposed, but that may not be the case in the final year of the new budget.

That’s because a study is taking a comprehensive look at the city’s fees, and results of that examination will be sent to the Council later this year.

The first year of the new budget should see city revenues reach $63.4 million, and $60.8 million during the second year, the pair wrote.

“The decrease between the two years is related to the Internal Service Funds reduction in pension obligation bond allocations to all funds,” they wrote. That reduction also is reflected in an expenditure drop during Fiscal Year 2016-17, they noted.

During Fiscal Year 2015-16, expenditures are expected to be $66.78 million, and in 2016-17 they should be $62.6 million, they wrote.

The new budget also shows the Special Revenue Funds drop because of drawdowns of the Valero-Good Neighbor Steering Committee Settlement Agreement account, and a one-time grant from Solano County for the Streets and Transportation Fund for a bus hub being built in the Benicia Industrial Park.

Net balances decrease by $3.3 million during Fiscal Year 2015-16, and by $1.8 million in Fiscal Year 2016-17, they wrote.

While reserves primarily are used to pay for deferred maintenance such as street resurfacing and traffic improvements, the city’s Water and Wastewater funds can’t cover capital expenditures or deferred maintenance, they wrote.

“In fact, the Water Fund has been so severely impacted by the drought costs and conservation efforts, it must utilize reserves to pay for operations and debt out of reserves during the next two-year budget,” they wrote.

Among the few changes the new budget will have compared to the previous biennial budget is the Council-approved funding of an assistant public works director and senior planner in the Community Development department.

A clerical position also will be modified there.

In the Economic Development division, the General Fund administrative secretary’s position is being reclassified as the economic development specialist, a change with minimal impacts, they wrote.

Three-quarters of the Literacy Program coordinator’s cost will be funded with Library-Literacy Special Revenue, and the Library-County Sales Tax Special Revenue will fund a librarian manager, a position that previously was frozen.

However, the library will freeze one senior librarian position, Schnaider and Cardwell wrote.

In Parks and Community Services, two recreation coordinator positions would be eliminated, replaced with one recreation supervisor, saving $40,000 the department might use for additional part-time hours.

Public Works Maintenance Division won’t have staffing changes, but the department may shift how positions are funded throughout its various divisions.

Among the resolutions the Council will decide Tuesday are those adopting a state appropriations limit based on the Consumer Price Index and population; the city’s investment policies; and the 2015-17 fee schedule.

“It should be noted that the Fiscal Year 2015-17 budget is the first budget since the Great Recession that departments were not recommending reductions in order to maintain the city’s reserves at approximately 20 percent of revenues, with two notable exceptions,” Schnaider and Cardwell wrote.

“First, the General Fund reserves drop to 19.5 percent in the Fiscal Year 2015-16, but return to 21.3 percent during Fiscal Year 2016-17.

“Second, the Water Fund revenues, resulting primarily from citywide water conservation efforts, are no longer sufficient to meet operations and debt expenses.

“The reserve levels are anticipated to drop below the 20 percent reserve level by Fiscal Year 2016-17 unless revenues increases occur.”

The Council will meet at 6 p.m. Tuesday to discuss real estate matters related to providing broadband service to Benicia Industrial Park.

The regular meeting will start at 7 p.m. Tuesday in the Council Chamber of City Hall, 250 East L St.