Mill Valley City Council unanimously approved revisions to its budget on Monday as part of its two-year financial cycle.
The Mill Valley City Council unanimously approved revisions to its $47.3 million budget on Monday as part of its two-year financial cycle.
Despite a loss of revenue due to the pandemic, the city has maintained a 15% contingency reserve, said Eric Erickson, finance and human resources director. He said this is due to the cuts made last year and the strength of the city’s property tax base.
“You have a balanced, healthy and still conservative budget that is before you,” Erickson said.
The city approved a balanced budget in July 2020 by cutting fire department staffing, freezing a police officer position and laying off four full-time employees, an engineer technician, two administrative positions in recreation and an administrative position in the fire department.
The revision to the the city’s general fund show revenues totaling $35.3 million and expenditures at $32.4 million, which is a decrease of $97,705 and $245,676, respectively, Erickson wrote in a staff report.
He said the prior cuts to staff were approved by the council last year and came out of the general fund. No changes have been made since.
He said the significant change in the budget revision came with the contribution of $400,000 to the CalPERS pension reserve to bring it up to the $1.2 million buffer against anticipated increases in the city’s contribution rate. The city’s net pension liability is about $41.5 million.
He added the city planned to make the contribution for the 2019-20 fiscal year, but decided to hold off to due to the financial impact of the pandemic.
Mayor John McCauley said making the payment to the pension fund now will help the city in the long run.
“There is a big cost coming our way and we are going to cede some money now so there’s not a big cliff in the future,” McCauley said.
In response to Councilmember Urban Carmel’s question about potential errors in the budget forecast, Erickson said he is uncertain how the parks and recreation department will fare heading into the next quarter.
“Recreation is a wild card right now,” Erickson said. “But I am comfortable in that you have an amazing (department) director in Sean (McGrew). He can pivot. … I think this fall will be a good bellwether of where we are going. If we get a variant surge and things are restricted more than they are now then we’ll be back with a report that we’ve downsized recreation.”
He said the proposed revenue for recreation program fees is about $1.2 million less than the adopted budget, which was projected to be about $3.5 million.
However, he said the city’s conservative fiscal approach, similar to other towns and cities in Marin, has helped it weather the pandemic. He said recreation is the largest concern, but there are some other pressure points to keep an eye on.
“Outside of recreation, the next largest thing is charges for service and planning and building,” he said. “But we still did a staggering amount of business during the pandemic.”
He said revenues in the revised total budget are $51.3 million, which is down by $1.2 million compared to the adopted budget. He added total expenditures are anticipated at $47.3 million, which is down by $382,548 compared to the adopted budget.
