Fiscal troubles may be in Pomona’s future, 10-year forecast shows – Daily Bulletin

Pomona could face financial troubles in the next decade if leaders don’t take action, according to a presentation this week by the city’s financial adviser.

Notably, Measure PG, a sales tax increase approved by voters in 2018, is scheduled to sunset in 2029, which could lead to a deficit in the city’s general fund. Certain projects, pension obligations and funding commitments could be left up in the air as a result.

About $16 million in general fund revenues comes in from the sales tax measure, according to finance director Andrew Mowbray.

On Monday, Dec. 19, the City Council was presented with a 10-year budget-based forecast looking at projected labor costs, operating expenditures, and revenues for the general fund. Part of that overview included recommendations and steps the city can take to better secure financial stability and sustainability.

The forecast, by the city’s financial adviser Urban Futures, is meant for future planning and establishing guidelines. The last 10-year forecasts came in May 2021 and in 2017.

One way the city can prepare for the possible drop in revenue is by putting Measure PG on a future ballot and removing its sunset clause, according to Jim Morris, managing director at Urban Futures.

“That’s an important item for the city’s long-term fiscal stability,” Morris said at Monday’s meeting. “It’s a critical lifeline.”

In response, Mayor Tim Sandoval called on councilmembers for support in sending the measure to voters in 2024, the city’s next general election. Part of getting buy-in from voters will be showing its impact so far on the city’s coffers and services, according to Sandoval

“It’s important to show why this has been advantageous,” Sandoval said. “What we’ve been able to show is an increase in our reserves and service levels.”

Finance department staff is also recommending the city update general fund reserves from 17% to 20% of operating expenses, eventually increasing to 22%.

That figure falls in line with what other comparably sized cities like Santa Clarita and Palmdale have adopted, according to a staff report.

The fiscal year 2022-23 first quarter budget showed Pomona’s reserve balance at 35%, which is 18% above the current goal of 17%.

Another recommendation is the creation of a catastrophic events reserve, which would cover “unforeseen claims, damages or claims liability,” the staff report reads. The reserve would start at $300,000 and increase for 10 years to reach $5 million.

To help with future pension liabilities, establishing a pension trust is also up for consideration. The trust would initially be funded at $1.5 million and then $500,000 annually. Funds in the pension trust would not be withdrawn and used for another expenditure by the city.

City Council direction and approval of the trust is expected to take place at the Jan. 23 meeting.

There is also a recommended measure to replace city equipment and high-cost vehicles through a designated fund starting at $100,000 with a goal of increasing annually to $400,00 at the end of 10 years.

One of the council’s other priorities is committed funding for youth programming. Currently, $1.3 million is budgeted for the 2023 fiscal year and $2 million annually for next 4 years.


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