Public Hearing On City Operating Budget Delayed After Council Cancels Meeting

The first in a series of public hearings on the city’s operating budget was delayed when officials called off Monday’s City Council meeting due to a rally at City Hall protesting the officer-involved shooting death of Anthony McClain in August.

The rally, which is expected to feature civil rights attorney Benjamin Crump, who represents members of George Floyd’s family, and local attorney Caree Harper, who represents McClain’s family members in litigation against the Police Department and the city, is set to begin at 4 p.m. in front of City Hall, 100 N. Garfield Ave.

The council is scheduled to consider opening the public hearing on the budget next Monday, May 24.

The coming fiscal year’s budget is on track to be 20% lower than last year’s, with the current recommended budget of $10,825,203 being $2,690,349 less than this fiscal year’s revised budget.

The recommended FY 2022 operating budget includes $286 million in appropriations for the general fund and $897 million for all other funds.

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.

Local and national economies are seeing 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.”