Crescent City faces an $800,000 budget shortfall in the coming fiscal year due to the pandemic.
And although the city council adopted a balanced budget June 22, City Manager Eric Wier told members more tough decisions lie ahead.
“This isn’t a typical budget that we’re going to adopt at this time of year and not visit again until mid-year,” Wier said. “This budget is one that’s going to come back to the council from time to time as we know more. We’ll be able to make more informed decisions and we’ll make those decisions as early as possible.”
Finance Director Linda Leaver then led councilors through the 2020-21 budget, which she called “Phase 1” as revenue projections remain uncertain while the state and local economies recover from the COVID-19 emergency.
“A lot is based around when the economy recovers,” Leaver said. “When consumer spending gets back to normal and how long that will take, and how long it will take for travel to get back to normal.”
She plans to update the council every two months.
The finance director said the biggest hit to the budget is the drop in sales tax and transient occupancy tax (TOT) the city collects from tourists staying at various facilities within city limits.
Leaver expects an 11% drop in sales tax revenue and 16% drop in TOT for the 2020-21 fiscal year, which starts July 1. With a projected revenue of $4.8 million and expenses of $5.6 million, the city’s general fund came up about $800,000 short as the budget was developed.
To make up that $800,00, the city has decided to keep Fred Endert Municipal Pool closed — an action that is expected to save $370,000.
Other expense cuts include travel and training, Sister City, ordinance updates, equipment replacement and the implementation of Crescent City Fire & Rescue’s master plan. A second K9 officer for this year was also trimmed.
And unless grant money is received, maintenance and capital improvement projects will be deferred and Public Employees Retirement System and legal services for code enforcement will not be paid, Leaver said.
Mayor Blake Inscore expressed his frustration of continuing to operate the pool at a loss. He said the city needs to create some partnerships and a long-term strategy for the pool.
"I’m a big pool proponent, have been since Day 1,” the mayor said, “but this is an unsustainable asset as it stands today. It’s going to be more expensive five years from now than it is today. Half-a-million a year to supplement out of the general fund to operate that pool. I just don’t see that as sustainable.”
Recreation and events director Holly Wendt said a stakeholder group is committed to meeting weekly to ensure the facility is sustainable after it reopens.
Due to the continued closure, the city council approved refunds for annual passholders and those who have paid for locker and facility rentals. The council also approved extending the expiration date for those who rely on punch cards to use the swimming pool.
“If revenue projections improve — revenues go toward increasing the fund balance — it may allow us to add in additional expenses,” Leaver explained. “One thing that’s very important to a lot of people in the community, the council and staff, is reopening the pool. However, if revenue projections don’t improve, we will need to look at making additional cuts.”
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