$6.7 million more than last June’s projections, total could be $51 to $58 million; will reduce the City’s reserves to less than 3%

Freitas questions use of ARPA funds, Crisis Response Team stats, deficits

By Allen D. Payton

According to the staff report for the Antioch Council’s study sessions on the budget for Fiscal Years 2025-27, provided over the past three weeks, the City’s near-future finances appear bleak. The report reads, “The total deficit over the next two years is $32,883,691, and if the deficit reduction measures City staff has proposed are added back to the draft budget, the cumulative deficit would increase to $51,158,875.” It will reduce the City’s reserves from 36.52% to just 2.94%.

The projected budget deficit for the current fiscal year, 2024-25, which ends on June 30th will be $5,358,842; $15,666,448 for 2025-26 and $17,583,418 for FY 2026-27. Those are increases from last June’s budget update to the city council. At that time, according to the General Fund Projections for 2023-2028 presented to the city council on June 11, 2024, the General Fund was projected to run the following deficits: $12,995,259 in FY 2025-26 and $13,561,074 in FY 2026-27. That’s an increase in the two-year deficit of $6,693,533. Last year’s budget projections also showed a $14,855,649 deficit in FY 2027-28. (See related article)

However, Finance Director Dawn Merchant explained that the projected deficit for this fiscal year is only $405,014, as the majority of the $5.358 million was rolled over from the previous fiscal year. (See below)

Freitas Wants Details on Success of Homeless Hotel, Crisis Response Team

District 3 Councilman Don Freitas questioned staff about the report on homeless services including the Opportunity Village motel on E. 18th Street, as well as the Crisis Response Team statistics and what feedback staff is looking for from the council.

During the Oct. 11th budget study session he asked, “What specifically are you looking for feedback from the council on these items?”

“Because, frankly, I’m still waiting for the data, you know, to come forward,” he continued. “So, I’m not quite sure what it is that you’re asking council.”

“I’m not asking the council anything,” City Manager Bessie Scott responded. “I think you all wanted these budget study sessions as we get ready to prepare our next biennial budget. I want to first start off by saying thank you to our (Finance) Director (Dawn Merchant) and her team. They’re able to do a lot for our community with very little.”

“I want to make sure that the data elements that you would like us to bring forward outside of these presentations are here,” she continued. “So, any specific data or presentations that you have, please feel free to ask us. I think that as we go forward the questions are actually for you to set budget and policy.”

Freitas then directed his questions to Public Safety and Community Resources Department Director Tasha Johnson.

“Earlier you said data shows that you’ve been successful. This as regards to ARPA funding. How is it measured as successful? What were the criteria? Particularly, the Opportunity Village. They’re not the only one. Cal VIPS, the Rubicon Program.”

“When I looked at the Angelo Quinto (Crisis Response Team) and I saw the 8,363 dispatches were made, it seems like an extraordinary number,” the councilman continued. “So, for me the question is out of that, how do you count a dispatch? Are there repeats? Are they all new? I have no idea what that number really, truly means. As well as the 3,149 welfare checks. Again, are these repeats? Are they singular? We need to be able to break down and try to measure,”

“I’m assuming with any program that the City has funded in the past, it was articulated what the goals, objectives and what success was,” Freitas stated. “I’d like to see when the program was discussed and approved by the past city council, what were those and did we meet them? If we were deficient then why were we deficient and are we addressing them moving forward?”

General Fund Budget Deficits Could Total $55-$58 million

Freitas then asked about the General Fund and projected budget deficits saying, “The other issue that I would have. All of these programs are deserving. But we have a terrible challenge in front of us and before I say what I think the number is, Ms. Merchant, I want to be clear in my mind. Now, this is in regards to…some of the funding and I noticed that in the report for General Fund expenditure reductions, this is for…Fiscal Year ‘26 and ‘27 that you have already talked to a lot of these departments and you’ve already cut the number in Fiscal Year ‘26 to $8.6 million and FY ‘27 to $9.4 million. I rounded up.”

“Mmm, hmm,” Merchant responded.

“But you also indicate that we have a deficit at the end of this year of $5.4 million,” the councilman continued. “And it’s anticipated next year to be $15.7 million, and we have a deficit in Fiscal Year ‘27 of $17.6 million. So, if I add the 8.6, the 9.4, the 5.4, the 15.7, the 17.6 we come up with a deficit, basically of $58 million. Is that right, wrong?”

Merchant responded, “I just would like to clarify as I did mention before for Fiscal Year 2024-25, that $5.358, that really isn’t a true deficit spending because encumbrances and purchase orders were rolled over, were not spent in Fiscal Year ’24. So, it was re-budgeted although the money was received in the prior fiscal year. It was re-budgeted into Fiscal Year ’25, essentially inflating the expenditure number. That’s why you’ll see the Budget Stabilization transfer is only $405,014 which you account for the money being rolled over from the prior year. The deficit remaining is only the $405,000 versus the $5.3.”

“But otherwise, yes,” she continued. “If you cumulatively add up the 15.6, the 17.8 and you account for what we’ve already backed out of the 8.6 and the 9.3, yeah.”

“So, roughly, still that leaves about 55 or 58 million?” Freitas asked.

“Yeah,” Merchant responded.

“As we move into years ’26 and ’27, those are true deficits,” the councilman stated. “So, they have no encumbrances, correct?”

“That is correct,” the Finance Director said.

Mayor Ron Bernal thanked the staff for “Building into the presentations, answers to my questions. So, 99% of my questions were answered.”

He then asked about the Crisis Response Team, that it “had been scaled up from what it had originally started as to where it is, today. I would like to know what it was before it was scaled up and what that cost is, and what the coverage of that program was, so we can see the two of them.”

The Council then closed the study session.

See meeting agenda packet, here – – https://www.antiochca.gov/fc/government/agendas/CityCouncil/2025/agendas/031825/031825.pdf

Watch video of March 11, 2024, council meeting.

the attachments to this post:

General Fund Budget Summary deficits

ACC 03-11-25 mtg screenshot

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