Blogging Bayport Alameda

December 9, 2014

Fund Balance beam

Filed under: Alameda, City Council — Lauren Do @ 6:09 am

Completely glossed over, but really good news from the City of Alameda, due to the improved economy, one-time “windfall” revenues, as well as conscientious budgeting by department heads, this year the City of Alameda Fund Balance ended at a whopping  $28.6 million.  In November, staff had anticipated that the number would be in the $21.2 million range.

The bulk of the money: $15.9 million will go straight into the reserves, which was set by Council policy at 20%, $1.3 million will go toward staffing and negotiated wage increases, which leaves a surplus of $11.5 million.

Here’s how the City got to that extra $11.5 million, from the staff report:

One time Revenue
Redevelopment Pass Throughs                    $1,300,000
Transfer Tax                                                     $   524,000
Lower Expenditures                                       $3,686,300
Improving Economy (On-going)                 $2,330,390
Reserves Already Above Policy of 20%      $3,637,630

TOTAL                                                               $11,478,320

The “Lower Expenditures” is a result of a Council adopted policy which allowed Departments to retain some of the savings in their budgets for the next fiscal year, instead of the former “use it or lose it” policy, which gave no incentive for City Departments to actually save any additional money.

The City Council adopted the recommendations of staff on how to allocate the $11.5 million which included directing nearly $4 million to the reserves which would bring the reserves up to 25% allowing for three months of operating expenditures.

$3 million would be placed into a fund to cover future deficits or for other long term liabilities (such as the unfunded pension liabilities etc).

$250K would go toward Emergency Preparedness Training and Supplies.

$2.4 million would go to Internal Service Funds which are “are funds that account for activities that provide goods or services to other funds or departments, on a cost-reimbursement basis, such as the Equipment/Vehicle Replacement Fund or the Technology Fund.”

$1.8 million will be allocated to unfunded Capital Improvement Projects (CIP) there’s a huge list somewhere of all these capital improvement projects that the City has wishlisted, most are unfunded because, well, there’s never been extra funds before.  Looks like these funds will go toward park improvements and sidewalk repairs.

$100K will be allocated to the Library for materials and training.  The Library always seems to take the biggest hit when it comes to budget tightening time, it’s only fair that the Library also gets a piece of a windfall.

Must be nice to be able to inherit a City that has managed to slowly correct some of the errors of past administrations.  The true test will be if this new Council will be able to maintain the momentum.   It sounds like the bargaining units already have a proposal to bring to this new Council with regard to funding the Other Post Employment Benefits (OPEB), we’ll see what sort of leadership emerges with that proposal and presentation.



  1. I’ve never seen “improving economy” as a line item on an income statement, or any other financial statement, for that matter.

    Is that an increase in sales or property taxes that is arbitrarily attributed to a growing economy? That’s all I can think of, and putting that in a document is quite irregular.

    Anybody got a clue what that means?

    Comment by dave — December 9, 2014 @ 9:49 am

  2. Houses in Alameda are selling, compared to years during the throes of the recession. The City gets a transfer tax from each sale, and property values in Alameda have increased about 23%. Property transfer tax also increased in 2008. I think that is what “improving economy” means.

    Comment by Alan — December 9, 2014 @ 10:06 am

  3. Did you happen to see “transfer tax” two lines above?

    Comment by dave — December 9, 2014 @ 10:12 am

  4. Blaming past local Administration for the fiscal position of the he City is not really fair , that blame has to be put only on the GOP and all these peoples we are electing in DC which bankrupted the Country going into 2 Wars everyone including themselves knew they could not win ,
    Sadly for the GOP reading this post , it is the very technique use by Ronald Reagan to bankrupt the Soviet Union , they should have learned from their experience
    They took over a Country with basically Zero national debt after a permanent 8 years fight with President Clinton , only to turn it into dependency of the Greater Asia , Oh but Peoples like Forbes Mag said creating Job would not help the US economy ???{ Fisher a local from san Mateo}

    Incidentally it is the small and medium business which have bailed out the Country not those super store , target , Safeway , Sears , JC Penney , they all either filed for bankruptcy or hided their assets .

    Locally we do have such Hero and He is , While facing online orders , at least 10 if not more other businesses have taken aim at his business , that would be Philip Jabber at Versailles Pharmacy , one of the very last independent own business in Northern California , they are the one with other small business who bailed out the City .

    The City like most , is benefitting of the national economic turn around nothing else , nothing more .

    Comment by joel Rambaud — December 9, 2014 @ 10:13 am

  5. Here’s an idea. Let’s see what the new council does or doesn’t do before we bad mouth them. It’s also prudent to note that changes good and bad are the result of the actions of several boards over the years and some of the players on board now were also on board in the past. This divisive us vs. them stuff is not very constructive.

    Comment by Denise Shelton — December 9, 2014 @ 11:02 am

  6. I guess we’ve all forgotten the six months after Marie Gilmore took office and the strum und drang that followed. It’s a much different City of Alameda than it was four years ago.

    Comment by Lauren Do — December 9, 2014 @ 11:26 am

  7. I certainly haven’t forgotten it, who could? It’s got all the elements of a municipal soap opera: shady deals to hire contributors without relevant experience, canning a fearless & competent leader because her facts were inconvenient, a traitor out for revenge, decent & honest public servants badmouthed for speaking the truth, and more.

    Lots of drama back then…

    Comment by dave — December 9, 2014 @ 11:50 am

  8. Except that “contributor[] without relevant experience” managed to produce a surplus whereas the “fearless & competent leader” left Alameda with a mess of budget tricks that did nothing to actually close any meaningful gap and left it to her successors to deal with and is still entangled in litigation with the City.

    Comment by Lauren Do — December 9, 2014 @ 11:55 am

  9. Everyone’s a genius in a bull market.

    Comment by dave — December 9, 2014 @ 11:59 am

  10. Of course I was referring to the budgetary mess left by the previous Interim City Manager and the previous Mayor that somehow was marked as the creation of the 2010 elected City Council. Since this is a post about the current City budget. But if you want to rehash about AMG and her legacy, there should be a judgment in her appeal case pretty soon and we can all reflect there about all the good the AMG brought to the City of Alameda. Including an almost four year old lawsuit which she lost in appeals court the first time around and had a judgement levied against her which she is now appealing.

    Comment by Lauren Do — December 9, 2014 @ 12:18 pm

  11. And likewise it was foolish to assume economic apocalypse was imminent.

    Comment by BC — December 9, 2014 @ 12:19 pm

  12. Since this is a post about the current City budget. But if you want to rehash about AMG and her legacy


    I remind our blogmistress that is was she who brought up AMG, with the links in post 6.

    Comment by dave — December 9, 2014 @ 12:22 pm

  13. Actually the common thread of the links were about the budget and the handwringing that ensued that the 2010 elected Council and the new City Manager hadn’t solved the problem yet. But, sure, if you want to make it about AMG, feel free since it was her failure to account for certain expenditures that left a huge gap in the 2011 -2012 budget:

    Comment by Lauren Do — December 9, 2014 @ 12:34 pm

  14. ah, a rising tide lifts all boats………..a rising tide may also spell mess up plans for the old navy base

    Comment by A Neighbor — December 9, 2014 @ 12:51 pm

  15. missing in #14 -spell doom or mess up…..

    Comment by A Neighbor — December 9, 2014 @ 12:53 pm

  16. Congratulations to the current City Manager and the current Mayor and Council. We can only hope that the incoming team can do as well. Let’s hope that this does’t turn out to be a Clinton to Bush scenario, where we have a high level of reserves when Clinton left, which than turned in to a black hole after 4 yard of Bush.

    Comment by Bill — December 9, 2014 @ 1:41 pm

  17. Ann Marie Gallant was corrupt, litigious, and financially incompetent as a city manager (#13 is Exhibit A). She cost the city millions in bad-faith lawsuits. This was money that could have been used to pay down unfunded liabilities. Kudos to the current mayor and council for repairing the damage and moving the city forward.

    Comment by BarbaraK — December 9, 2014 @ 2:41 pm

  18. I think our current Mayor, Council and City Manager has done an outstanding job. Let us not forgot that our bond rating was increased to A++ while on their watch as well.

    Comment by Karen Bey — December 9, 2014 @ 2:52 pm

  19. Ah, so it’s all Bush’s fault. Who’d a guessed.

    Comment by jack — December 9, 2014 @ 3:22 pm

  20. Litigious, yes. No argument there. Corrupt & incompetent? No way. I worked with her & she’s very sharp. In 08/09 she was working in a triage situation and she kept the city between the ditches. (I will add that Fred Marsh was also very solid)

    To say that Gilmore/Russo “repaired the damage” is a vast overstatement. They failed to meaningfully address the elephant in our room: public safety compensation. Already bloated compensation continued to increase during their term, both in absolute dollars and as a percentage of GF budget. Marsh was very good at his job and deserves far more credit for balance sheet cleanup than either the mayor or CM, who simply enjoyed the luck of a rebounding national economy and a local tech boom.

    I didn’t bring Gallant into this conversation, but since the subject was raised, I will defend her. She was good at her job.

    Now can anyone tell us just what comprises the “improving economy” line item?

    Comment by dave — December 9, 2014 @ 3:38 pm

  21. 18

    While Alameda’s GO debt rating has never been a problem, the rating increase was due to a change in Moody’s methodology, not any actions taken by the city.

    Comment by dave — December 9, 2014 @ 3:44 pm

  22. Sorry, make that S&P methodology, not Moodys. but point stands.

    Comment by dave — December 9, 2014 @ 3:51 pm

  23. AMG used a series of accounting “tricks” in previous years to “balance” the budget, which is fine, but clearly not sustainable in the long run. She failed to address public safety compensation at all, let alone “meaningfully.” She had the Council majority’s (Johnson, Matarrese, and deHaan) blessing to pretty much ram through whatever she wanted and she couldn’t make anything happen. She let a much worse contract than the ones that have been successfully negotiated by this current administration to continue to be in place because she could not get labor to the bargaining table to talk, let alone “meaningfully.”

    AMG left the City’s budget in shambles and fortunately the people who were charged with unwinding all that, first Lisa Goldman and Fred Marsh and subsequently the new City management team, were able to do so. It doesn’t really matter how “sharp” she is, her inability to secure a new City Management position speaks volumes to her competency.

    Comment by Lauren Do — December 9, 2014 @ 4:05 pm

  24. #23 Do you even have any idea if Anne Marie Gallant wanted another city manager position?

    You may come to a point in your career when you want to shift gears.

    Comment by A Neighbor — December 9, 2014 @ 8:24 pm

  25. Here’s a quote from Standard and Poor on the City’s change of bond rating taken from the Alamedan:

    “The rating agency Standard and Poor’s cited the city’s strong financial management as a key factor in increasing the city’s bond ratings”.

    And finally, it took decades to create this “elephant in the room” as you call it, yet this administration is the only administration that put a plan in place to address it; and they did it during a period when we were experiencing a deep recession. The pension reform plan is a long term plan because it took a long time to create it.

    And as for the luck – we are enjoying the benefits of an improving economy because this administration laid a strong foundation. Had they thrown up their hands and filed bankruptcy – we would be facing an entirely different situation.

    Their approach was a gradual approach – balancing the need to keep as many services in place as possible while reducing costs and putting a pension reform plan in place. Their plan also focused on economic growth instead of just cutting.

    I’d also like to give this administration kudos for all the capital improvement projects that are going on – the sewer replacement project, a large number of streets have been re-paved, the new street lights on Buena Vista, the beautification of the Historic Park Street District, the bike lane projects, and of course all the new parks that have been approved and partially funded on their watch: the Jean Sweeney Open Space Park, the Cross Alameda Trails, and the Estuary Park.

    And to end their term with an increase to the general fund reserves is a testament that they got it right! Thank you Mayor Gilmore, City Council, City Manager, and Staff!

    Comment by Karen Bey — December 10, 2014 @ 6:34 am

  26. Here’s a quote from S&P taken from S&P itself:

    SAN FRANCISCO (Standard & Poor’s) Sept. 18, 2013–Standard & Poor’s Ratings
    Services raised its rating on Alameda, Calif.’s outstanding general obligation
    (GO) bonds to ‘AA+’ from ‘AA’. Standard & Poor’s also raised its ratings on
    Alameda’s outstanding certificates of participation and lease revenue bonds to
    ‘AA’ from ‘AA-‘. The outlook is stable.
    “The rating changes are based on our recently released localGO criteria,” said
    Standard & Poor’s credit analyst Matthew Reining.
    In addition, Standard & Poor’s assigned its ‘AA+’ rating to the city’s series
    2013 GO bonds and ‘AA’ rating to the city’s 2013 financing project
    certificates of participation (COPS).


    This is really NOT a material issue, it just annoys me to hear people assigning credit to politicians for something they had no hand in.

    As for the whole “this mess took a long time to make so it will take a long time to fix,” that just a flimsy rationale for continuing to do the bidding of the IAFF. IF the outgoing administration had taken material steps to fix things, that line would have some merit. They’d deserve credit for beginning to solve what everyone agrees is a long term problem. Instead they continue to increase compensation while patting themselves on the back.

    It is a bit amusing, though, to see AMG is still the bête noire of the Gilmore Groupies. Everything from world hunger to the designated hitter has been blamed on her at some point or other.

    But I still want to know if anyone can clarify “improving economy” as a line item. I’ve been reading docs like this for decades and don’t recall seeing that as a line item with a specific sum attached to it.

    Comment by dave — December 10, 2014 @ 7:31 am

  27. “improving economy” is a break-fire excuse so when the city screws things up again it will be blamed on the line item “declining economy”.

    Comment by jack — December 10, 2014 @ 9:21 am

  28. Just saw this today. Regarding Pensions

    Comment by frank m — December 10, 2014 @ 9:38 am

  29. Rewinding through the budget discussion at the 12/2/2014 council meeting (toward the end), most of the surplus (at least the $3.6M line item) came from salary savings in the police department because of retirements/vacancies.

    Comment by Alan — December 10, 2014 @ 11:01 am

  30. As a City did our debts grow or shrink in unfunded pensions,medical benefits for retires, Deferring Maintenance to City assets like buildings, streets, and parks while Gilmore was Mayor.

    Comment by Lets look at whole picture — December 10, 2014 @ 11:34 am

  31. #30 I’ll be asking the same questions during the next four years.

    Comment by John P. — December 10, 2014 @ 1:09 pm

  32. What is our Present Balance and money owed for unfunded Pensions, Medical Benefit’s to retires, and what is our present balance on deferred maintenance on city assets like our Streets, Buildings and Parks……. They say the most important thing when communicating is what they aren’t talking about……Maybe that’s the case here.

    Comment by Lets look at whole picture — December 10, 2014 @ 5:13 pm

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