Outlining Clayton’s efforts to cover budget deficit

CLAYTON, CA (April 19, 2023) — When the Clayton City Council adopted the city’s current year budget, it did so with a $127,000 operating budget deficit. This deficit was covered by appropriating reserves from American Rescue Plan Act (ARPA) money.

At a recent Budget/Audit Committee meeting, staff updated its revenue projections for the city and determined that revenues for the year would likely come in higher than anticipated by approximately $82,000 from a combination of sources, the largest of which was property taxes. Expenses for the year were also forecast to come in lower than originally anticipated by $84,000 due to staff vacancies.

These fluctuations emphasize the need to conduct robust analysis in order to gather information upon which to base decisions. Rather than focus on suggesting a parcel tax as a first resort, we need to dig deeper and understand the basis for any projection, the sensitivity of any projection, and any levers available to us in order to impact the overall results and test the projections against actual results.

Given the focus on fiscal sustainability, I wanted to provide an update on one project that has the potential for significant savings as well as making the city more energy efficient as a whole. We have been working with Climatec, a vendor we engaged to assess potential savings across all of our energy uses – including gas, water and electricity.

Phase I of their work was the assessment, which was done at no cost or obligation to the city. Recently, the city entered into Phase II of our agreement, contingent on the city being able to secure funding for the project.

The project will include a number of energy- and cost-efficiency elements, including solar arrays that will power all of the city’s buildings, in addition to providing shade structures for city vehicles; new lighting across our buildings, parks and streets; new HVAC systems at Endeavor Hall, the library and the maintenance building; building automation systems controlling utility usage; EV charging stations at the library; and irrigation control systems with master valve flow meters to shut off water flow in the event of a breakage.

All of these things combined will cost approximately $2 million, with an overall savings of $4.7 million over the life of the equipment. We also applied to the California Energy Commission (CEC) for an energy efficiency loan. The CEC credit facility is designed for local governments and is offered at a 1% interest rate.

While there are potentially other funding options, the CEC credit facility is the most favorable. We should hear back regarding our application sometime in May. If we are able to secure funding through the CEC, there will be savings to the General Fund as soon as the project is complete, which is expected to take approximately a year.

While no single effort will solve the fiscal challenges that the city faces, with this effort combined with other activities the city is working on, we are making progress. These challenges did not start overnight, and they will not be solved overnight. But through persistent effort, we will ensure that we are exploring all available levers to put us on track toward fiscal sustainability.

Send comments and questions for the mayor to jeff.wan@clayton.ci.gov