Politics & Government

RDA Debt, Council Pay Surface in Budget Talks

The new city council, finance committees and city staff met late Tuesday night to discuss the city's budget.

The City of Hercules could be in default if it doesn’t make its August redevelopment agency debt service payment, said Finance Director Liz Warmerdam Tuesday night, when the city council members and the citizens' advisory finance ad hoc committee met for the first of a series of city budget workshop meetings.

Warmerdam said the city is currently $1.8 million short of making its debt service, though she didn't specify if that was for the August payment alone or the scheduled February payment, too.

Annual RDA debt, she said, is now $14 million, about $1.5 million more than next year's proposed general fund budget, which pays for essential services like police, parks and public works

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The first budget workshop, which was initially scheduled to include details on the city’s general fund and RDA budgets, only scraped the surface of general fund revenue and expenditures, while talks of RDA financials were pushed back to a Wednesday session and possibly a Thursday one as well. Those sessions will touch more on the city’s debt obligations, Warmerdam said.

However serious the issue of Hercules’ debt, the most lively part of Tuesday’s meeting came almost two hours in, at about 10:30 p.m., when the discussion turned to cutting council compensation to help preserve the general fund.

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“Why in the world should taxpayers be paying health care for the five of you?” resident Bill Kelly asked the city council, pointing out that the council position is only part-time. Mayor Myrna deVera said that the council, many of whom have day jobs, work tirelessly on the council, which can affect council members’ health.

A document circulated at the meeting revealed that the city paid almost $91,000 to the city council members in salaries and benefits this year.

Council members who opted not to receive medical benefits received cash payouts ranging from $868 for former councilwoman Joanne Ward to $4,800 for former Mayor Ed Balico.

In an attempt to contain costs, the council proposed cutting their salaries by 20 percent, cutting retirement benefits and eliminating pay for "additional" meetings, some of which, like redevelopment agency meetings, are conducted back-to-back with council meetings and earn them an additional $30 a pop.

Hercules was one of eight Contra Costa cities that spent more than the $39,377 countywide average on council salaries and meeting fees, a recent report said. The report recommended Hercules review its council compensation.

“What is the average (of local cities’ council compensation) and maybe that’s what your target should be,” Warmerdam said.

Mainly through staff and service reductions, Warmerdam has helped lead the city toward narrowing a $6 million general fund budget gap, which was identified by an outside auditing firm in March, to $1.4 million. Warmerdam said that the city hopes to reduce the gap to $1 million by the end of the fiscal year with police concessions.

The next budget workshop is tentatively scheduled for 6 p.m. Wednesday in the City Hall Council Chambers. It is open to the public.


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