Jessica Cejnar / Friday, May 15 @ 4:19 p.m.
Crescent City Slashes $500,000 From 2019-20 Budget to Heal $650,000 COVID-Caused Revenue Wound
Crescent City’s budget will be slashed by about $500,000 to make up for the $650,000 drain the COVID-19 emergency has had on revenues through the remainder of the fiscal year.
City Manager Eric Wier told Councilors on Monday to expect “something like this every couple of months” until the pandemic is over. Though state and federal officials are discussing a stimulus bill that may help cities weather the financial storm, it’s uncertain when that support may come, Wier said.
“As we start to know more, we’ll be able to make better informed decisions,” he said, “but the sooner we act, the better off we’re going to be from a financial standpoint.”
Along with approving a declaration that an emergency continues to exist, the City Council unanimously authorized the proposed cuts.
One of the cuts include putting work on the engineering and architectural design of the new city hall building — originally budgeted at $75,000 — on hold.
Another proposed cut affects the Fred Endert Municipal Pool, which is currently closed. Two positions, the aquatics supervisor and part-time recreation lead, will remain vacant through June 30. Keeping the pool closed is expected to save the city about $61,500 through the remainder of the fiscal year, according to the staff report.
The budget cuts will take Crescent City through July 1 and is a first step, said Finance Director Linda Leaver. Before the cuts, the authorized 2019-20 budget was about $7 million, she said. The city would have had an ending fund balance of $2.2 million at the end of the fiscal year, but COVID-19 has caused sales tax, transient occupancy taxes and gas tax revenues to tank, Leaver said.
With the proposed budget cuts, the city is expected to have remaining balance of $1.7 million in its general fund at the end of the fiscal year, according to Leaver. She said she also anticipates budget short falls for the 2020-21 fiscal year.
“All of the items that are proposed to be cut tonight are items that could be reinstated at any point when our finances allow it,” Leaver said. “We are not currently proposing anything that would be a permanent change to the way the city functions.”
Another significant savings to the city occurred at the Crescent City Police Department. Entry level officers replaced those that were at the top of the pay scale when they left, according to the staff report.
Police Chief Richard Griffin also made schedule changes that resulted in reducing overtime, Leaver said. This resulted in a budget cut of $142,250 to the police department, according to the staff report.
Leaver said staff removed most of the legal services that were budgeted for in the city’s code enforcement budget because there no current cases that need those services.
About $7,000 in the remaining portion of the Sister City budget will be returned to the general fund along with $4,000 for a range at the Crescent City Cultural Center and much of the travel budget for the rest of the fiscal year, Leaver said.
A proposed expenditure of $17,000 to replace streetlights this fiscal year will be postponed until after July 1, Leaver said. However, Leaver asked for permission to place the order for the streetlights, noting that they wouldn’t arrive until July. She said that expenditure will appear in the city’s 2020-21 budget.
City staff discussed if it should reduce the final annual payment to the Crescent City-Del Norte County Chamber of Commerce. Leaver said staff recommended the Chamber receive its full payment from the city.
“The Chamber, we feel, is providing us a lot of support to local businesses right now and is going to be very important in the recovery phase of this,” Leaver said. “As I said, we are trying to focus on cuts that will save us money now, but not hurt us when we go into the recovery phase.”
Crescent City contributes a total of $72,000 annually to the Chamber, Crescent City Mayor Blake Inscore said. About $61,000 is allocated to the Del Norte Visitors Bureau by the chamber.
Noting the swimming pool is a sensitive topic — several people argued against shuttering it when the Council initially declared an emergency March 16 — Mayor Pro Tem Heidi Kime asked about swimming lessons.
“That’s my one area that I worry (about),” she said. “The kids are going to be at the river. They’re not going to have access to swimming lessons and I have fears around that.”
Local resident Teena Suzuki, who holds a swimming pool annual pass, asked about refunds.
Wier said because the length of the closure is still up in the air, staff is still evaluating on how to address pass-holders. As Councilors and staff discuss the city’s 2020-21 budget, Wier said, refunding pass-holders will likely be talked about.
“We don’t have a direct answer for you,” he told Suzuki. “But there will be some recommendation for the Council to make it an equitable return for those annual pass holders.”
Though they said they weren’t happy about the cuts, the Council noted that they were necessary. Councilor Jason Greenough said that opening up the economy will help “stop the bleeding,” but reopening needs to be done safely.
“We’re not going to see our revenues come back up to the same level for awhile, I think, because people aren’t just going to jump out and start traveling again,” he said. “We’re going to have to be a little more measured in our decision-making come the next, maybe, couple years.”