Antioch Council given two mid-year budget projections with reduced revenues due to coronavirus

While both budgets project a healthy reserve with a transfer in from the Stabilization Fund, one budget projects the city “will completely run out of money in Fiscal Year ‘25”

By Allen Payton

During their meeting on Tuesday night, the Antioch City Council was presented with two proposed mid-year budgets for Fiscal Years 2019-21 for them to review and give input for a final vote on April 28. Both budgets show a deficit in Fiscal Year ‘19-20 of approximately $4 million mostly from a previous legal settlement and re-appropriated funds from the previous fiscal year. The results of the coronavirus pandemic is projected to have an impact on the proposed FY ‘20-21 budgets. See complete agenda item, here: 2019-21 Mid-Year Budget Review ACC041420

“This budget report is unique, as we are three to four weeks into the COVID-19 pandemic. It’s having an impact on revenue,” said City Manager Ron Bernal.

“We’ve prepared two budgets for council, tonight. We’ll come back on April 28 for a final, Mid-Year Budget that we’ll ask you to adopt. Then have us come back in August with a study session with a better idea of impacts of COVID-19,” he continued. “Fortunately, for the City of Antioch, our property taxes are well diversified. Antioch is in a good position. But what we want to do is make you aware that there is a possibility we could be running into difficulties.” See budget details, here: 2019-21 Mid-Year Budget Comparisons

According to the staff report, both budgets project healthy reserves at the end of each fiscal year and reflect a transfer in from the Stabilization Fund to balance the budget.

“The CAL-PERS (state’s public employee retirement) fund has lost a great amount of its value. So, that will have impacts for years to come,” Bernal explained. “There’s a lot of uncertainties in this budget. But we have enough certainties to ask for your input.”

“We really do not know how this is going to roll down to the City of Antioch. We have best projections on sales tax revenues,” said City Finance Director Dawn Merchant. “We are fortunate to have a Costco, Walmart and Target, all three businesses that are operating during this time.”

“The city could have a $4 million short fall in sales tax, next year. It will be a deferral. But, that’s only if all businesses take the sales tax deferral” being offered by the state, she explained.

Merchant said the budget version one expects that “sales tax will start to rebound in Fiscal Year ’22.”

In version two “the city completely runs out of money in Fiscal Year ’25,” she explained. “We don’t know where we’re going to lie. I don’t want to be too optimistic. But we want to be fiscally prudent, at this time.”

Mayor Sean Wright and the council members then offered direction to staff.

Wright proposed holding off on contributions to OPEB (Other Postemployment Benefits for retired city employees) of $1.3 million and $500,000 in one-time expenditures to “allow us to go into ‘20-21 without a deficit.”

His suggestions include the public information officer and risk manager positions.

“I’m a stickler on the OPEB,” said Council Member Lori Ogorchock. “On the other ones you mentioned, I don’t have a problem,” except for cutting the funds for median improvements.

“Related to the PIO…the current contract extension is through September ’20,” said Bernal. “So, we will have a $24,000 commitment to complete the contract.”

“It may be something to come back and consider in September, depending on how hard COVID hits us,” Wright responded.

“What if we look at version one and we come back closer to August and consider the changes we’re going to make?” asked Ogorchock “Do we have to before August or can we wait until August?”

“You can give direction to the city manager with positions and hold off on any definitive hiring. You do have that alternative…to stall on the hiring until we know more,” Merchant responded.

“I’m OK on holding off, that includes holding off on some of these projects, like the utility box (painting),” Wright said.

“We’re not going to get all these positions hired before April 28, not even until August,” Ogorchock responded. “I think if we go with version one…we are moving in a positive direction. Like Ron said, we are in a good position. Property taxes still have to be paid and the property values haven’t gone down.”

“Some of these have already gone out, correct?” Council Member Monica Wilson asked.

“We have the artists lined up, but we haven’t given them the work to do, yet,” Bernal explained. “What we have listed here are things we haven’t committed to, yet.”

“I’m OK with going forward with version one…if that’s what council wants to do,” Wright stated.

“I just want to make sure is we do include the $75,000 for the part-time unhoused resident coordinator for FY 20-21,” said Mayor Pro Tem Joy Motts. “I’m OK with going forward with versions one and two and reviewing it in August.”

“I’m OK with version one then going forward to August,” Wilson stated.

“I’m not for stopping anything. Let’s keep the ball rolling, particularly with OPEB,” Council Member Lamar Thorpe said.

“For the $850,000 in OPEB for Fiscal Year 2020, we have to put it in the budget by June 30th,” Merchant explained.

“If we have to do it by the final June meeting, we can hold off,” Ogorchock said.

“The direction I heard, Dawn was that we would keep rolling forward with the OPEB,” Wright stated.

Regarding the parking abatement team, “they’re pulling all those cars off our streets,” Ogorchock said.

“It’s not included in either budget version, so, it will add approximately $21,000,” Merchant said. “Council Member Thorpe said he was fine holding off on it.”

“We can hold off on deciding on it,” Motts said.

Merchant asked about Motts’ proposal to add in $75,000 for the unhoused resident coordinator.

“Let’s hold off on that so we can talk with our consultants,” Thorpe said.

The council held off making any cuts or additions to the proposed budgets, for now.

Approves $27 Million Settlement with Department of Water Resources

In other action, on a unanimous vote the city council approved the settlement agreement with the Department of Water Resources (“DWR”) of $27 million, replacing the 1968 agreement over the city’s pre-1914 rights to the river water. (See related article)

Approves Urgency Ordinance on Land Use, Subdivision and Zoning Applications

In addition, in response to the Emergency Declaration by City Manager Bernal on March 17, the council approved an “Urgency Ordinance Suspending Automatic Deemed Complete and Approval Deadlines for all Land Use, Subdivision, and Zoning Applications”.

According to the staff report by Forrest Ebbs, Community Development Director, “Both state and local land use laws impose a variety of timelines for the review and action on land use applications. Failure to comply with these timelines can lead to applications being deemed incomplete at the front end of the process or actually not being deemed approved at the back end. In either event, the impact of failing to meet these timelines is limit on the City’s (and the public’s) ability to review and comment on pending land use applications.”

Due to the current situation “it is difficult or impossible for the City of Antioch to process land use applications within normal time limits imposed by state and local laws,” Ebbs added in his report.

Formed Transitional Housing Ad Hoc Committee

In the council’s final action of the meeting, they approved the formation of a Transitional Housing Ad Hoc Committee. Motts and Thorpe want the City Council to continue their work helping the homeless, now that the Homeless Encampment Ad Hoc Committee was dissolved, earlier this year.

The committee will “explore transitional housing opportunities, which are designed to provide homeless individuals and families with the interim stability and support to successfully move to and maintain independent permanent housing, and support services for unhoused residents of the City of Antioch.”

The council approved a motion to form the committee for six months and appoint Motts and Thorpe to serve on it.

The meeting was adjourned at 9:03 p.m.

the attachments to this post:

2019-21 Mid-Year Budget Comparisons

2019-21 Mid-Year Budget Review ACC041420

2019-21 Mid-Year Budget Comparisons

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