Expecting a big drop in sales tax revenues due to the recent economic shutdown related to COVID-19, the Ceres City Council advanced cautiously on Monday to adopt an interim budget for Fiscal Year 2020-21. The council has adopted a wait-and-see approach on a number of positions that are now vacant or frozen, including three frozen firefighters and four police officer positions.
The city is starting out the new budget year that starts on July 1 with General Fund reserves of $6.4 million. Revenues are projected to come in at $23.6 million with projected expenditures of $24.2 million. About 80 percent of that goes toward police and fire, code enforcement and animal control.
In his first budget presented since the departure of Toby Wells, City Manager Tom Westbrook said while the city expects to receive less revenue, expenditures are expected to rise due to salary increases, new positions and health insurance and retirement costs.
The city could realize a $680,000 or more drop in sales tax revenue because of many retailers closing during the coronavirus pandemic.
In addition to the drop in sales tax, the city will be receiving less money from the developer agreements crafted to allow cannabis manufacturing and sales in Ceres.
The interim budget does not consider that Ceres will be entitled to some of the $1.6 million in CARES Act funding. Those federal dollars must be associated to COVID-19 related expenses.
The council agreed to fill vacant or frozen positions that are funded by non-discretionary enterprise accounts, such as sewer and water, since they are funded by monthly ratepayers. But the council struggled with positions that come out of the General Fund.
Of the 21 vacant or frozen positions, which would cost $3 million if filled. Those positions include a water resource analyst, two police dispatchers, firefighters, code enforcement unit secretary, wastewater operator, fleet mechanic, custodian, parks maintenance workers, IT analyst, Human Resources analyst, deputy finance director, administration secretary, recreation supervisor, associate engineer, engineer technician and director of Community Development.
Police Chief Rick Collins said he lost one dispatcher and an additional one would give the city 10 total. But another is out on leave. He said in the short-term he could get by with filling one of them.
Councilman Mike Kline wanted to see at least 911 dispatcher position filled. One dispatcher impacts the budget by $87,500 annually.
Councilman Bret Durossette voiced his opinion that waiting to fill the vacant public safety positions is a disservice to the public.
“I seriously believe that in order to give our citizens what they should have that we don’t increase the overtime by not hiring the two firefighters and police officer – the ones we just lost,” said Durosette, who suggested COVID relief funds should help.
Vice Mayor Linda Ryno suggested, however, that if revenues turn out to be much lower than anticipated the city would have to look at reorganizing. She continued pressing for the need for the city to not spend more than it takes in despite ending with a 23 percent reserve.
“I know how important police and fire are but I’m just leery of spending general fund money,” said Ryno. “We don’t know what our situation is going to be. And again … we’re already spending more than we’re bringing and we don’t even know what our true numbers are.”
Condit agreed that fiscal restraint is in order.
“We do not know what the future holds,” said Condit. “We are going to see a shortfall. We are going to have to make some tough decisions, some tough cuts and come up with a strategic way and maybe even a creative way in trying to … balance this budget.”
Public Works Director Jeremy Damas pressed the council to fill vacant positions in fleet service to keep up with the approximate 400 pieces of equipment, including new fire vehicles.
Mayor Chris Vierra said while he is concerned with how the revenue figures might look in September, he was agreeable to hiring the dispatchers out of the General Fund positions and wait to see about hiring more police and firefighters.
“September will be here you know it,” said Vierra. “And even if we were to authorize all of these I don’t know if you’re going to be able to hire them before them.”
Because of this year’s budgetary restraints, the city will be unable to tackle the collective operational debt on the Community Center operations.
The interim budget allows the city to operate through the first quarter of the 2020-21 budget year but the council will need to adopt a final budget prior to Sept. 30.
Ryno motioned for the interim budget to include the hiring of all non-General Fund positions and only one emergency dispatcher out of the General Fund. Her motion essentially put off the filling of the frozen police and firefighters. The motion passed 4-1 with Channce Condit voting no.