City budget holds big payday for employees

City budgets are complex documents — a tangle of employee positions, infrastructure projects and arcane accounting that all come to a head each year around June. But the big theme of Mountain View’s $125 million budget is the city is due to get a huge windfall — and officials have already figured out how to spend some of it.

The city recently has been conducting appraisals on various properties leased to Google. And as luck would have it, Mountain View financial staff are reporting the value of these sites has skyrocketed.

For example, the 21.6-acre North Bayshore site known as North Charleston was re-evaluated last year and saw a 141 percent increase in value. That translates into an extra $3.3 million each year in lease revenues for the city’s coffers.

Another Google-leased property, the Crittenden site, has approximately doubled in value. That lease is now expected to provide an extra $3.1 million annually for the city.

This good fortune has been a long time coming, said city Finance Director Patty Kong. Mountain View originally signed leases for North Charleston and Crittenden in the mid-1990s with the agreement they would be reappraised every 10 years. That means both sites were last reassessed around 2006, unfortunate timing, as the approaching Great Recession meant they were locked in at a relatively low value for a decade.

That all changed last year as the scheduled time arrived to revalue these two sites. The city hired an appraiser; Google hired an appraiser, and both parties negotiated on a new amount that was somewhere in between.

“You can see now that these leases are all coming due during a very high assessed-value period,” Kong said. “These property leases have become a very good source of revenue generation.”

More good news is coming down the line as the city will also be reassessing the value of the two parcels that comprise the Charleston East property. This site is where the company is currently launching a major construction effort to build the first of its signature canopied dome office complexes. That new appraisal is scheduled for February 2018.

City officials have already found one substantial way to spend the lease revenues — they’re planning a series of raises for the 585-person City Hall workforce. Through several new union contracts stretching through 2020, Mountain View officials have agreed to give most employees a 4 percent raise this year and one again next year.

A smaller salary increase that varies across employee groups is also planned for 2019-2020. Most employee groups agreed to take 1 or 2 percent raises for this period.

Those salary increases will cost Mountain View a total of about $3.8 million for the 2017-2018 fiscal year. According to the Voice’s estimates, those higher wages will cost roughly $7.8 million as the second increase kicks in during the 2018-2019 fiscal year. By 2020, that annual cost could balloon to about $9.8 million.

The Voice tabulated these figures for future years based on amounts provided by city finance officials, although one public employee group has not yet signed a new contract. The EAGLES association, which represents various City Hall professionals, has reportedly reached an impasse in negotiations with city administrators. For these employees, the Voice used a reasonable estimate based on the salary increase schedule agreed to by most other employee groups.

The bargaining agreements were approved by the City Council earlier this month after several closed-door meetings with union representatives. On June 13, council members approved new contracts with the Service Employees International Union, which represents 168 city employees and the 68 members of the International Association of Fire Fighters. On the same night, the council members also signed agreements with various unrepresented employee groups.

“We value the work of our employees and their pay should be above average,” Councilman Lenny Siegel said ahead of the vote. “When we put together these packages, we’re thinking of our employees and thanking them for what they do.”

It should be noted that Mountain View’s employees are not all paid from the city’s projected $128 million in general fund revenues for the coming fiscal year. Some positions, such as interim planners, are funded through developer fees held in separate accounts. The city’s full annual revenues are projected to surpass $312 million.

The City Council approved all the contracts in unanimous votes.

For the fiscal year beginning July 1, the city’s budget calls for spending around $61 million in infrastructure projects, which could be a city record, according to staff. Those dozens of projects include construction of new parks at Wyandotte Street and at the corner of Evandale Avenue and Piazza Drive. A third new park would be designed for an unspecified location in the South Whisman area. In North Bayshore, the city is planning to use $12 million to begin building reversible bus lanes along Shoreline Boulevard.

Perhaps the most relevant budget issue for most Mountain View residents is buried near the back of the nearly 600-page document. Utility rates are due once again for a sizable increase. Water rates are slated to go up by 7.1 percent while sewer and trash services will both rise by 10.1 percent. City officials indicate these increases will together amount to about a $10 increase on a monthly utility bill for a single-family household. Commercial and large apartment ratepayers will see a smaller, 2 percent increase in garbage rates instead of the 10 percent hike.

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