Pinole’s Budget in Brief

In brief, Pinole’s budget can broadly be divided into 4 categories- expenses and revenue linked to the sewer plant rebuild; the 2006 sales tax, expenditures linked to which go to police, fire and dispatch; the 2014 sales tax, expenditures linked to which go to a much broader array of city agencies; and everything else (the general fund). Depending on your preference, you can get the pdf budget here or the spreadsheet budget here.

The sewer plant rebuild has cost and will continue to cost the city in the future a substantial amount- by my calculations, $10,404,995 of Public Work’s $15,672,834 expenditure budget is going purely to the sewer plant rebuild alone, with another $2,385,251 going to collections. That leaves $2,352,813 as Public Work’s non-Sewer budget. However, the city also gets significant bound revenue to offset that cost, from Hercules in the form of reimbursements and from sewer customers in wastewater treatment charges.

Because the 2006 and 2014 sales taxes are not included in the general fund, the amount the city relies on sales tax revenue isn’t immediately clear. If you just look at the general fund revenues, sales tax looks like 25% of the city’s revenue. But if you combine all the city’s revenue sources, sales tax goes up to 40% of the city’s unbound revenue. This is a risk when there’s an economic downturn.

The city’s 5-year projection predicts sales tax revenue will remain flat next year and the year after, when the city predicts there will be a recession (B 10-11). I think that might be overly optimistic- when the big box stores shut down, as Toys R Us and OSH already have, they aren’t necessarily going to be replaced by sources of equivalent sales tax value. Furthermore, in a recession discretionary spending tends to fall- I would expect a drop in sales tax value, not a slight increase.

I think the city needs to seek out new revenue sources, as the city itself notes in its Financial Policies:

i. The City will strive to maintain a diversified and stable revenue base that is not overly dependent on any land use, major taxpayer, revenue type, restricted revenue, inelastic revenue, or external revenue.

(A-9). Right now, I think the city is overly dependent on sales tax revenue, and is therefore at risk if and when a recession happens or if the big box stores keep on going out of business.