Public Hearings Set to Open Today On City’s Operating Budget

NOTE: The City Council meeting for Monday, May 17 has been canceled — this item, which was to have been considered, will occur at a future meeting. Pasadena Now will keep you updated.

The City Council on Monday is expected to open an ongoing series of public hearings on the city’s operating budget, which will continue until June 21, just prior to the start of fiscal year on July 1.

The proposed operating budget — including city-affiliated agencies and the city’s Capital Improvement Projects —tops out at $897.8 million, exactly $20 million more than the last fiscal year’s adopted budget.

The recommended Fiscal Year 2022 operating budget includes $286.7 million in appropriations from the general fund.

14.85 fewer full-time employees are proposed in the budget plan.

“The city of Pasadena’s Charter, Section 902, requires that the annual operating budget for the upcoming fiscal year be submitted to the City Council on or before the third Monday in May,” according to the staff report.

As expected, the impacts of COVID-19 will affect the budget, which assumes that the city’s General Fund will be needed to fund $10 million of the $12.5 million annual debt service obligation associated with the Rose Bowl, with the Rose Bowl Operating Co. making up the remaining $2.5 million.

The Rose Bowl lost millions of dollars in revenues when the iconic stadium was forced to close during the pandemic.

The local and national economies are realizing strong recovery in some areas, while other sectors appear to be very slow in returning to normal, furthering the belief that a “K” type recovery/recession will continue to occur.

A K-shaped recovery occurs when different parts of the economy recover at different rates.

The travel and tourism industries, for instance, are expected to take three to four years to resume business as usual. Restaurants, and other local businesses may also take years to come back.

Due to these factors, revenues such as the transient occupancy tax, certain sales tax categories, and parking and related revenues are expected to take as long as four years to return to pre-COVID-19 levels.

Additionally, account receivables owed to the city for utility bills, emergency medical services and other services have grown by 1,000%, with utility receivables alone exceeding $8 million.

The ability to collect these bills will have a direct impact on a number of funds, including the General, Power, Water, Refuse and Sewer funds.

As part of the process, departments will begin to present their budgets to the mayor and the City Council on May 24 and continue each Monday until June 21, when the council votes on a final budget.

“For FY 2022, the Department’s strategy is to maintain a flat budget as much as possible with the exception of a few general changes which include PERS, general liability, 1% COLA, and insurance coverage administered by the Budget Division,” City Manager Steve Mermell wrote in his budget transmittal letter.

“Compared to the FY 2021 Revised Budget, the Career Services Division has reduced the Personnel budget by $1,772,418 and Services and Supplies budget by $1,139,756. The budget decrease is a result of budget amendments in FY 2021 which added $3.6 million in new grant funding to Career Services.”