A car crosses the new Bon Air Bridge in Larkspur on Tuesday, June 28, 2022. (Alan Dep/Marin Independent Journal)
Larkspur officials plan to distribute unspent reserve funds on capital projects, chiefly the $16 million expanded library plan.
The City Council received a presentation on Feb. 7 about $17.5 million in general reserve funds accrued over the last several years during the Bon Air Bridge replacement project.
Dan Schwarz, the city manager, recommended the additional money could be best used for a capital improvement project such as the new library.
“This is money that, in the end of the fiscal year, is there,” Schwarz said.
Schwarz said more concrete recommendations for capital improvement expenditures are pending. The council gave direction to secure approximately $7.1 million of the general reserve funds for capital improvement projects, designating that others be spent on anticipated payments and unfunded liabilities.
Schwarz plans to return to the council this spring with itemized capital improvement costs.
“We should review our capital improvement projects and look at this globally,” said Mayor Scot Candell.
Larkspur has developed a larger than usual general fund revenue in the last years because of its need to have cash on hand for the Bon Air Bridge replacement. The project required the city to pay all bills and then request reimbursement through Caltrans. The bridge project took about 49 months and cost $26.7 million.
Throughout the project, the city built a cash reserve by deferring payments to its unfunded liabilities. At the same time, the city also had a rise in property taxes from developments.
“Cash flow management is always our obsession because we are a property-tax-based town,” Schwarz said.
The council adopted a resolution in 2022 to keep more than half the funds in the general fund reserve and for unspecified capital projects. A smaller portion was put aside for infrastructure maintenance on the Laurel Avenue retaining wall, inlet gates for the lagoon at Larkspur Marina and the general plan update process.
Council policy is to maintain a reserve balance for unforeseen contingencies in any given year. The city receives property tax revenues for its general fund, but only twice a year. The reserve gives the town liquidity to manage expenditures during the year.
The 2022 resolution committed about $10.4 million. The discussion on Wednesday allotted funds for salary and benefits for firefighters and police; CalPERS, the public employee retirement benefits system; and retiree medical commitments. A staff report noted there were anticipated increased costs in those categories and some unfunded liabilities during the bridge project.
The remainder would be designated for capital projects, bringing the total amount to about $7.1 million. It will be used to address mitigation projects with the Bon Air Bridge and the forthcoming library project.
At the same meeting, the council voted unanimously to expand the library budget by about $4.7 million to pay for expanded improvements in the library design, including landscaping and structural plans.
The building will be located at the Commons, a city-owned parcel at the corner of Rose Lane and Doherty Drive. The Commons Foundation, a nonprofit, has raised donations, and the city will also receive state grants to fund the majority of the project.
The city’s budget projected $22.4 million in revenue and $21.1 million in expenses for the current fiscal year.
