The Colusa City Council held two special workshops in the past month to try and whittle down nearly $500,000 in anticipated expenses while still including some of the things on the city’s list of wants and needs.
Due to the COVID-19 pandemic, city officials anticipate a significant drop in revenues from sales taxes (down $97,000), transient occupancy (hotel) taxes (down $20,000), interest on investments (down $9,000), plan check and planning (down $107,500), and building and other permits (down $10,000).
The City’s new projected budget anticipates general fund revenues to be about $3.9 million, with projected expenditures of $4.2 million.
“At the July 21 workshop, the city estimated a $471,000 projected budget deficit,” said Finance Director Toni Benson. “Currently, we are going to have a $290,000 deficit.”
While Benson said revenue from sales taxes are down, the city has projected a $89,000 change in their favor from what they estimated initially in July.
Although the city general revenues are down, as a result of the pandemic, some funding sources are up. The city did receive a housing element grant ($160,000) and a rural business development grant ($234,000 with a cash match of $130,000), Benson said.
Benson also made a few other changes since the first workshop. The city removed the “must have” loader truck that costs $180,000 from the general fund budget and placed it in the sewer enterprise fund budget, which has approximately $3 million in unrestricted reserves.
City Manager Jesse Cain said that the Public Works Department could then essentially rent the equipment by reimbursing the sewer fund approximately one-third the total purchase price over a 10-year period.
Also not in the budget are a number of identified “immediate needs,” including a $160,000 aerial truck, a $314,000 street sweeper, $50,000 to do the tennis court overlay, $75,000 to resurface the pool, a $100,000 dump truck, and $100,000 to upgrade and repair Veterans Memorial and Sankey Park restrooms, along with new vehicles, playground equipment, sidewalk repair, and playground equipment.
The City Council did authorize the Chief of Police to fill the lieutenant’s position, which has been vacant since October, although the position is basically a swap position of a patrol officer, Benson said.
The city anticipates filling the position by Sept. 1, at a cost for the remainder of the 2020-2021 budget year of about $101,000. The Police Department has received a $38,000 grant help offset the cost, Benson said.
Although not directed by the City Council at the first workshop, the new economic director position has already been added to the budget, with a start date of Oct. 1.
While the projected budget did not include a requested code enforcement technician ($58,411), Building Inspector ($72,000), Public Works Administrator ($53,906), Street/Parks Superintendent ($90,349), the City Council did direct Benson to add a staff position/administrative secretary to the Building and Planning Department, because it had been promised to Community Development Manager Bryan Stice when his job duties were rewritten.
Although the general fund currently shows a deficit, Benson said the city would make further adjustments at a midyear review.
The water fund, which is part of the city’s overall budget, is estimated to be $3.56 million, which includes a reserve of $300,000 for meter replacements. Benson said she anticipates water fund revenue to come in about $222,870 above anticipated expenditures.
Likewise, the sewer fund is also in the black, with $9.3 million in projected revenue over $6.8 million in expenditures. The fund has a current fund balance of $4 million, of which $1.2 million are restricted reserves.
Benson said in addition to a shortfall in the 2020-21 budget, there are a number of concerning factors that will affect the 2021-22 budget and beyond, including increasing payroll costs (salary steps); CalPERS unfunded liability, which increases $67,000 next year; Retiree and Active Health Insurance Costs (OPED); necessary equipment replacements; and aging infrastructure.
The City Council anticipates adopting a deficit budget at their Aug. 18 meeting. ■