A portion will go for police cars, city staffing, graffiti removal and to help pay accelerated utility bills 

By Shawn Masten
TIMES STAFF WRITER 

RICHMOND -- Halfway through the first year of the new two-year budget cycle, Richmond finds itself with an unexpected surplus of nearly $1.2 million, but city leaders aren't exactly jumping for joy. 

The small windfall comes from the real estate transfer tax, building fees from the on-going construction boom and rising electricity rates, bringing more money to city coffers through the utility users tax. 

Still, with the economy showing signs of slowing and the energy crisis adding to an uncertain fiscal climate, city officials are recommending conservative spending. 

Following the advice of finance director Anna Vega after a mid-year budget review this week, a City Council majority voted to put about a third of the expected surplus -- or a little more than $400,000 -- into reserves. 

"Until we know where the economy is going, we should not expend all of those new funds if we don't need to, unless there is an emergency," Vega said. 

The action brings the city's reserves to nearly $5 million, or almost 5 percent of the city's $83 million budget for the current fiscal year. 

The city's emergency savings account is still shy the 15 percent that accountants recommend cities keep on hand, but it is a substantial improvement over the $800,000 in reserves the city started with two years ago, Councilman Gary Bell said. 

"I'm very proud of the fact that we've tried to maintain that fiscal discipline," Bell said. "As the economy continues to slow down, as it appears to be, we'll be able to draw on those reserves in order to avoid service or staff cuts." 

The city will spend the remaining surplus -- roughly $740,000 -- to pay some unanticipated bills, including $101,476 in higher energy costs resulting from a November rate hike by PG&E. That figure reflects projected costs through June. 

That electrical rate increase is also expected to bring the city nearly $200,000 more in its utility user taxes. 

The difference -- a $93,000 windfall -- could be used to buy and hand out to residents energy efficient light bulbs and programmable thermostats, Mayor Rosemary Corbin said. 

City officials and leaders have been looking for ways to help people conserve energy since rates went up. 

"It's something we will definitely take into consideration," Bell said. 

Corbin also reiterated her request that the city restore past service cuts in the main library. 

"We ought to be putting some of that money back into our library," Corbin said. "The book budget needs money." 

That recommendation may be taken up soon by the council finance committee, Bell said. 

Other expenditures approved by the council with the surplus funds include purchase of two police cars, hiring two additional accountants for the finance department, graffiti removal and an early retirement benefits package for former city staffers. 

By a 7-0 vote the council this week also authorized issuing credit cards with $2,500 limits to council members who want them. Those expenses will be taken from the $32,000 travel budget shared by the city's eight council members. 

Corbin, who has a separate travel budget and credit card, and Councilman Tom Butt, who rarely travels, abstained. 

The cards will enable council members to conduct city business without having to put up their own money first, Bell said.