VISALIA – Visalia City Council was presented with an updated projection of the city’s budget at its latest meeting, at which time they approved a one-time policy change that will transfer $12 million of revenue to the planned civic center project for the construction of three buildings.
The current policy maintains that surplus revenue be deposited into the emergency fund. The change to the policy approved on April 15 will see a smaller deposit to the emergency fund, which is projected to be at 28% of expenditures. The current policy states that Visalia keeps an emergency fund at 25% of expenditures. In addition to the one-time change, staff recommends increasing the reserve to 30%.
Visalia is in the process of developing a new civic center, which has made it past the planning stages. The civic center fund is at $58.9 million and requires an additional $12 million to fund construction. After hearing the presentation, the council voted in favor of the policy change.
As previously reported by The Sun-Gazette, Visalia has been in the process of developing a new civic center complex since at least 2019. Initially, the plan called for a three-story complex that would house police, fire and city officials. That plan has been modified to feature a two-story building after costs ballooned from an initial expectation of $26.5 million to the current $71 million cost.
The developer earlier explained that the cost jump was due to a change in the plan which initially only included public services space, not a space for city officials.
The construction will allow for a larger city council chamber and conference rooms that will allow about 200 people to attend meetings. The current chambers hold about one-third that number and frequently overflow as residents bring concerns to the council.
Overall, the projected budget indicates a robust economy in Visalia, with increases in all revenue streams. The one area that staff pointed to that could be an issue in the future is sales tax revenue.
After an unprecedented rise in revenue from sales tax, the numbers are indicating a tapering off and could even go negative. Staff explained the change is due to COVID-19 stimulus payments that increased consumer spending. Now that those funds are gone and inflation remains high, spending has slowed as a result, leading to a drop in revenue.
(Rigo Moran)
The city’s sales tax revenue is projected to total $46,625,500 for fiscal year 2023-2024, a slight drop from the actual revenue of the previous fiscal year. Sales tax is by far the largest source of revenue in Visalia. Property tax is second and is projected to reach $17,383,800, an increase of more than $350,000 over the previous fiscal year.
Total revenue is projected to exceed $100 million in the current fiscal year, while expenditures are slightly below budgeted projections at $84,539,500. Staff explained that expenditures were lower than budgeted due to numerous vacancies that have not been filled but were budgeted as though they would be.
Additional spending was approved for several capital projects, which all together totalled to just over $1 million. These projects are being funded through revenue income.
The largest approved expense from the projects was $575,000 allocated for necessary repairs to Rawhide Stadium. The repairs needed include replacing the ticket booth roof, smaller repairs and maintenance and a $500,000 expense to repair a fence. This expenditure is not related to the ongoing lawsuit between the team and the city over mandatory upgrades to the stadium to keep it in compliance with MiLB rules. City staff declined to provide a comment on the status of negotiations in that matter, as it is ongoing litigation.
A separate expenditure from the convention center fund of $500,000 was also approved. This spending is to completely replace an elevator that was installed in 1970 and is no longer operational. The elevator is required for Americans with Disabilities Act compliance and caused the cancellation of three events that caused a loss of $15,000 in revenue.
Twenty-eight thousand dollars will be spent to replace SCBA air tanks used by the Visalia Fire Department when entering burning buildings or when handling toxic chemical spills. In all, 24 tanks will be replaced due to the age of the equipment.
Another $110,000 will be spent to replace the elevator at the parking structure located at 222 W. Acequia and to repair fire suppression systems at the structure. Staff explained that the elevator has a hydraulic oil leak that has made it inoperable. The leaking fire suppression system is also a hazard.
The Stonebrook Park well will be replaced after it became inoperable last year due to a hole in the well wall. That project carries a cost of $100,000.
