Dublin enjoyed budget surpluses for decades after it was incorporated in 1981. The good times ground to abrupt halt in 2008 when the recession halted new construction and revenues plunged.
The city staff, under City Manager Chris Foss, has issued a 10-year financial forecast that shows the city will face a time of financial reckoning soon. Using conservative revenue productions, city staff estimated that the city will have to dip into its reserve funds by the year 2020-21 budget when expenses will exceed revenues. That will be to maintain existing service levels.
What’s even more challenging is that the numbers do not account for a potential recession, despite the ongoing 89-month expansion (about 1.5 times longer than the typical recovery). The staff report estimates that the city could take a $4.8 million hit in sales and property taxes over a one-to-two-year period in a downturn like 2008.
The current year budget is about $75 million with a healthy $25 million reserve fund. Those reserves are projected to climb to $40 million before the expenditures exceed revenues. What’s notable is that the finances project stable personnel levels. Expenses are based on reasonable assumptions.
One big change in revenue will be in development services that will plunge from 11.3 percent of the General Fund to 3.1 percent of total revenue over a nine-year period as the city nears buildout on the east side.
The city staff now is analyzing what is the appropriate level of staffing for police services that currently are contracted with the Alameda County Sheriff’s Department. It cost $225,000 annually for one officer. As the city continues to grow, presumably public safety staffing (police and fire) need to grow to maintain the same level of service.
What does this mean to the Tri-Valley? The path is now clear for Costco to build a new warehouse store and gas station on Johnson Drive in Pleasanton (pending City Council approval but within the special plan for the area). Dublin is going to feel pressure to increase revenue.
Studies are currently underway about the potential traffic impacts of an IKEA store on land the retailer already owns on Hacienda Drive at I-580. IKEA, like the San Francisco Bay Premium Outlets in Livermore, is a huge regional draw. IKEA only has two Bay Area locations (Emeryville and East Palo Alto) and a Dublin location will be a traffic magnet.
It's easy to imagine a parking lot on I-580 on holiday shopping weekends when the outlets and IKEA will be jammed. Those updated traffic reports will bear careful reading when they are released.