How to resolve AdBlock issue? This year’s document is presented online in the OpenGov format, which allows users to look at various graphics and explanations of the different budget units.
The document shows that revenue for all city funds totals $18,274,194 in the 2020-21 budget, down from the total $23,446,230 for the 2019-20 budget.
City Manager Alan Flora noted in his introduction to the budget that 2020 was supposed to be “that year” – the one in which Clearlake’s history was put behind it and the city “walked into the better future this community deserves.”
What the city got instead – like so many other cities, businesses, organizations and individuals nationwide and worldwide – is a year filled with unexpected challenges which have shuttered businesses, led to major job losses, stretched financial resources and caused many other hardships.
At Thursday night’s meeting, Flora told the council, “It’s definitely a unique situation that we’re living in.”
In his budget explanation, Flora pointed out some of the positives, such as how the community found ways to support each other while many city projects continued. “We found ways not to let our progress stop, but to look beyond this pandemic to a new day,” he wrote.
Even so, Flora told the council that they can expect hardships, including that the city will see some of its revenue sources down by 10 percent or more.
The picture is not entirely bleak, however. Flora said all of staff’s budget projections indicate that Clearlake will not be as impacted as some other communities which more heavily rely on tourism and, as a result, “are seeing staggering reductions in workforce and revenues.”
Actions Flora said the city has taken include departments keeping spending at “status quo” levels, with only scheduled salary increases; eliminating or reducing one-time expenses and contract services; no new projects or initiatives; and freezing most unfilled positions.
There “are a lot of conflicting opinions out there about where we’re headed,” Flora said.
He said that Beacon Economics, an independent economic research and consulting firm based in Los Angeles, is forecasting that the 2020 coronavirus recession will be one of the sharpest but shortest on record. Just how quickly the state’s economy returns to full speed rests largely on the willingness of the public and consumers to return to their regular routines.
Flora pointed out that the state of California will have to make considerable budget cuts this year, but that he doesn’t believe that the situation ultimately will be as extreme as projected.
He said the California Department of Finance’s revenue forecast, which calls for no growth in the United States’ gross domestic product, is likely overly pessimistic, and noted that most California job losses so far have occurred in lower-paying sectors of the economy, which have a lower impact on state revenues.
He said forecasts are for a V-shaped recovery, with pre-COVID-19 levels of production expected in the United States by year’s end, at which point national unemployment – most recently reported to be at 13.3 percent – is expected to be back in the 5-percent range.
Flora said there are drops in revenue sources such as sales tax, with the city also facing the possibility of deferred sales tax payments until later in the new fiscal year, a measure the governor is allowing to help businesses.
During the discussion, both Vice Mayor Dirk Slooten and Mayor Russ Cremer said they believed fiscal quarters coming up – not the current one – will actually be the most telling in understanding the financial picture.
Flora noted during the meeting that the city currently doesn’t have a finance director, and he credited Police Chief Andrew White and City Clerk/Administrative Services Director Melissa Swanson with stepping up to help craft the new budget.
Making adjustments
Flora said that in the 2019-20 fiscal year the city’s personnel costs were undercalculated. In the new budget, the city has adjusted its allocation of several positions, and has unfunded unfilled positions such as associate planner and facilities maintenance worker jobs.
They also are budgeting salary savings by not filling some jobs temporarily, like keeping a community service officer job open for six months, and keeping two police officer jobs vacant for two and six months, respectively.
There will be adjustments for the city council’s health insurance costs, reduced projects and equipment to balance reduced revenue from the Measure V road tax, and the use of additional fund balance from gas tax and SB 1 funding for projects, Flora said.
Areas that Flora said will see little or no adjustments include the budgets for the city attorney, city manager, finance, parks/city engineer/community center, administrative services, building maintenance, Community Development Block Grant and low- and moderate-income housing programs.
Several capital projects will move forward. Flora said they include road work on Pearl, Emory and Mullen, chip sealing and a local partnership project on Modoc and Second.
Facilities and infrastructure work that Flora said will continue, funded through Series A bonds and grants, are Austin Park, the new animal shelter, the Public Works corporation yard, improvements to the senior/community center and Airport Road.
There was no public comment on the budget before Councilman Phil Harris moved to approve it, Councilman Russ Perdock seconded and the council approved it 5-0.
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