Efficiency Experts Find Several Paths that City of Redding Can Take for Budget Savings - Fire Department is Named as Needing Fixes
REDDING, Calif. — Circle 6 Consulting Inc. will present its comprehensive findings on ways to reduce unnecessary budget spending at the Redding City Council meeting scheduled for Tuesday, September 15, starting at 6 p.m. The public can view the meeting agenda packet, with the 83-page presentation attached, on the city's website (or click here). However, the report starts on page 236 of the agenda packet, and the agenda file is large (462 pages) and takes a while to download. The firm’s mid- and long-term roadmap points to hotel-tax collections, a profit-and-loss look at 84 city-owned buildings, fee models that do not recover the true cost of development review, Fire Department overtime and labor rules, purchasing cards that cannot explain millions of dollars in charges, and unused growth capacity around Oasis Road and Interstate 5.
The Council hired Circle 6 on March 17 for a four-phase “Rapid Efficiency and Cost Reduction Engagement" on the recommendation of newly hired City Manager William Tarbox, who unexpectedly died of cardiac arrest in July. Interim City Manager Michael Webb previewed immediate “quick wins” on Sept. 1; that tranche — vacancy salary lapse, stale purchase orders, and dormant capital balances totaling about $83 million in captured or recoverable capacity across city funds — was covered in prior reporting. Almost all of that $83 million sits in enterprise funds ($78 million). The General Fund slice on the same slide is about $4.0 million, plus vacancy salary lapse listed separately at $1.01 million in FY26 and up to $1.85 million in FY27 if vacant General Fund jobs stay frozen. This packet is the rest of the study: Phase 3 opportunities and a Phase 4 governance structure to keep the work from dying after the consultant leaves.
Hotel tax: collect what is already owed
Circle 6 recommended tightening Transient Occupancy Tax enforcement and installing a stronger reconciliation and remittance platform so operators report, pay, and are audited on the same system. The consultants treated TOT delinquencies as recoverable revenue, not a new tax. The TOT slide is titled “End-to-End TOT Revenue Assurance: Unlocking $750K–$1.5M in Recurring Revenue with $3M+ Transformational Upside.” Circle 6’s base case is about $0.3 million to $0.9 million a year in General Fund uplift, stretching to about $1.0 million–$1.2 million if short-term-rental leakage is larger than expected, plus one-time back collections, penalties, and interest of roughly $0.2 million to $1.5 million. The firm still says not to budget the leakage-prevention figure until Finance has a reconciled lodging register.
84 buildings, no citywide P&L
The city owns 84 buildings — about 900,000 square feet across civic, public safety, utility, library and community facilities. Circle 6 said Redding should produce a profit-and-loss statement for city facilities and land — occupancy, operating costs, deferred maintenance, lease income, and surplus property — so Council can see which sites earn their keep and which are carrying costs with no service purpose. The same workstream would feed decisions on surplus sales, co-location, and whether departments should keep paying internal rent on space they barely use. The consultants put recurring General Fund relief from a portfolio reset at about $0.5 million to $1.5 million a year, with $5 million to $25 million-plus in one-time or strategic value if the City sells, ground-leases, or stops investing in assets that fail a mission test. The sharpest subsidy example in the deck is the Civic Auditorium: about $1.03 million in General Fund transfer in FY24-25 against roughly $216,000 to $220,000 in rental fees.
Development fees that do not match the work
The firm recommended a full cost-of-service model across building, planning, engineering review, inspection, plan check, deposits, and technology and overhead charges. The point is not automatically raising every fee. It is to show, line by line, which reviews the General Fund subsidizes and which deposits and overhead charges are outdated. Until that model exists, Circle 6 said, Council cannot tell whether Development Services is underpriced, overstaffed, or both. The FY26 subsidy signal in the deck is about $1.34 million; after setting aside $200,000 to $300,000 for work the City may choose not to recover, Circle 6 puts roughly $1.0 million as potentially recoverable, with a recurring target of about $0.8 million to $1.1 million a year.
Fire labor: overtime and compensatory time
Fire Department overtime remains the sharpest operating problem in the packet. In Fiscal Year 2024-25, Fire Department labor costs were $10.897 million. Overtime alone was $4.650 million — against a $2.234 million overtime budget. Twelve firefighters added in March 2023 under a SAVER grant, which required the extra people to expand crews rather than serve as relief staffing, were later dropped in the months before March 2026. The Fire Department has five vacant positions to fill to reduce reliance on overtime. As the Fire Department schedules its staff, overtime is "baked in" to the schedule, as explained in the Circle 6 Consulting slide below.
Circle 6 recommended negotiating the Fire Department memorandum of understanding to eliminate or reduce compensatory time off (CTO), which the firm tied to the same overtime spiral: time off earned at premium rates then has to be backfilled at premium rates. A companion slide says cutting or eliminating CTO could save up to $2.6 million a year. Fire-side actions — labor and overtime changes, contract or MOU revisions, and a possible new ordinance — were estimated at about $1.37 million in the first year and $2.39 million in the second, depending on how fast the city can finish the work. Other cost-cutting suggestions include downgrading an engine from three firefighters to two when the third person is absent ($322,500 a year), restructuring Fire Prevention ($692,700 in year-one savings), a modified First Responder Fee (about +$300,000) excluding calls for "lifts", a Buckeye MOU (about +$50,000), and city-owned Type III engines with year-two reimbursement potential of $1.022 million. The report also listed potential savings by creating a fire protection district.
Payment fees and the purchasing card
Two smaller but concrete recommendations sit on the revenue and controls side.
First, payment modernization: capture credit-card convenience fees instead of eating merchant costs on city billings.
Second, CAL-Card discipline. CAL-Card is the State of California’s purchase-card program — a Visa card issued to named employees. It is a payment tool, not a separate way around purchasing rules. The agency still has to follow bid limits, sales-tax rules, and its own procurement policy. The card is billed to the city, not to the employee. Typical uses are small, routine purchases so staff doesn't have to cut a purchase order or check every part, supply, or service.
The city’s card activity is sloppy on paper: thousands of charges with no purpose or description, a large “Misc” bucket, and spending concentrated among a few cost centers and employees. The recommendation is tighter coding, vendor review, and quarterly accountability — not that the city should stop using the cards. Circle 6 reported 3,425 transactions with no purpose listed ($1.25 million); 3,270 transactions totaling $1.62 million with no description; and a “Misc” bucket that captured $5.55 million. Spending, the firm said, is highly concentrated in a small number of cost centers and employees. The recommended fix is purchasing discipline and vendor optimization, with quarterly accountability reviews so missing descriptions and miscellaneous coding cannot pile up for another year.
Pensions and dispatch stay on the long-term list
Using June 30, 2024, CalPERS valuations, required unfunded-liability payments for FY 2026-27 are $19.456 million for the Miscellaneous plan and $15.261 million for Safety — about $34.7 million citywide. The General Fund appears to absorb all Safety UAL and about 28% of Miscellaneous UAL, or roughly $20.7 million a year, a figure Circle 6 called directionally correct pending a check of cross-charges and reimbursements. The city has no meaningful Section 115 pension trust.
Modeled options — stay on the current CalPERS schedule, a 15-year or 10-year “fresh start,” or a 15-year taxable pension obligation bond — all trade near-term General Fund cash for long-term savings. Circle 6 said not to pick a structure off planning ranges. Finance should confirm whether bond debt service could be allocated the same way current UAL costs are recovered, obtain live taxable quotes, and only then put a go/no-go in front of Council. If the General Fund cannot absorb about $2.8 million extra a year right now, the firm said the prudent path is to finish the analysis and wait.
On dispatch, SHASCOM now charges about $1.4 million each for Fire and Police, with those bills expected to rise to about $1.8 million each. CAL FIRE has indicated Fire dispatch could be provided for about $800,000 a year. The City of Redding, not the departments, is the SHASCOM member, so a Fire-only shift needs a negotiated amendment; a full withdrawal takes two years’ notice. Circle 6 recommended validating SHASCOM’s cost-to-serve, exploring a Fire-to-CAL FIRE pilot that leaves 9-1-1 and police dispatch in place, and building a separate 10-year case for a city-run public-safety answering point.
North Redding growth corridor
On the growth side, the consultants suggested unlocking the corridor around Oasis Road and the I-5 interchange in North Redding. The report suggests an Oasis Road/I-5 financing district, a Stillwater data-center pitch, and a city fiber strategy. The deck's mechanism is an Enhanced Infrastructure Financing District. Circle 6 floated $1.5 billion in potential future buildout assessed value, $5 million to $10 million a year in EIFD-supported tax increment, and $60 million to $100 million-plus in bond capacity. Separate slides pitch Stillwater Business Park as a data-center campus ($500 million to $750 million-plus in private investment if a tenant appears) and a city fiber backbone ($10 million to $60 million in 10-year public value). No data-center tenant has committed, and those figures are not in the immediate savings stack.
What Council is being asked to do
Item 9.1(c) on the City Council's agenda is to accept an informational presentation. Phase 4 of the study is an execution layer: weekly executive reviews, named owners, and a dashboard that separates money already captured from money still forecast. The same night, Council will also take a report on the Financial Advisory Committee (item 9.1(d)), following Sept. 1 direction to tie that committee to financial policy work.
The largest remaining dollars — hotel-tax enforcement, facility P&Ls, a true cost-of-service fee model, Fire MOU changes, CAL-Card controls, pension structure and dispatch — all require legal review and later Council action. The Sept. 15 packet is posted at cityofredding.gov and in the city’s IQM2 agenda portal.
Vice Mayor Dr. Paul Dhanuka posted on his Facebook page, inviting the community to informal conversations regarding the efficiency study in the Vice-Mayor's Office (3rd Floor, Redding City Hall) on Friday, September 11, 1 p.m. - 2 p.m. or Tuesday, September 15, 1 p.m. - 2 p.m. ]
