Finance Committee to Receive Update on COVID-19 Impact on City’s Finances

The city is owed millions of dollars in back utility payments since the pandemic began according to a city staff report.

As of Sept. 30, outstanding accounts receivables for all city utility billing 61 days or older totaled $4.65 million. In comparison, the outstanding amount at the same time period last year was $686,613.

State requirements prohibit the city from charging late fees or disconnecting service related to the nonpayment of bills through April 16.

The city is reminding customers of their debt and offering options for payment arrangements. 

“PWP expects that most of the currently outstanding balances will ultimately be paid by Pasadena customers, with some opting for payment plans that will be made available,” said Shari Thomas, Pasadena Water and Power assistant general manager. “Although the accounts receivable balances are substantial, the utility funds are fiscally healthy and the overall effect is manageable without significant impacts.”

The city is expected to present a financial update on Thursday at 2 p.m. to the city’s Finance Committee. http://pasadena.granicus.com/mediaplayer.php?camera_id=2&publish_id=9

According to the report, General Fund revenues could come in as much as $8.4 million less than the originally adopted budget. 

While some of the revenue loss is directly offset with expenditure reductions such as the Transient Occupancy Tax (TOT) transfer to the Pasadena Center Operating Company or reduced parking enforcement costs, additional mitigating measures such as hiring freezes and managing procurements of services and supplies will continue.

“Staff continues to analyze the impacts of the health

pandemic and related economic turmoil for short and long-term impacts,” said Finance Director Matthew Hawkesworth in a city staff report. “These events will have lasting impacts on the revenues and expenditures of the City and its Operating

Companies.”

According to the report the city General Consumer Goods category realized the largest losses in comparison to last year at almost $1.2 million. Losses due to the closure of restaurants trailed at $965,000. 

However, both losses in those categories were expected and some of it is offset by Measure I sales tax to online purchases delivered in Pasadena.

But other deficits were not expected. According to the report, the Transient Occupancy Tax revenue is being revised downward by $1.4 million.

“Based upon recent conversations, it is believed that the closed hotels will not open until January 2021 at the earliest,” the report said. “Until major events and business travel resumes, we can expect prolonged challenges for the hotel and related industries.”

The reports lists stays by Major League Baseball during the playoffs in September and October as an unexpected bright spot that could increase TOT during those months.  

Personnel expenditures for the first four months of the fiscal year are tracking $5.0 million less than budget. 

The personnel budget has generally been conservative because it operates as if assumes all positions are filled. The conservative mindset regarding vacancies are expected to result in savings at fiscal year-end. 

The city also elected to pre-pay the FY 21 CaIPERS Unfunded Accrued Liability payment in July. The move saved the city approximately $1.4 million across all funds and more than $500,000 in the General Fund.