Empty playgrounds, canceled classes: The Parks and Rec programs sustained the most losses under the coronavirus.
The city is facing a two-year projected deficit of $850,000 as a result of COVID-19, despite taking several actions to decrease expenses.
The bleak news was revealed June 16 when the City Council received a Preliminary 2020-2021 General Fund Mid-Cycle Budget Update.
With approximately one-third of the General Fund going toward salaries and benefits, the city must look at further reducing personnel costs. Programs supported by fees and charges will be impacted the most as declining activities due to shelter-in-place has resulted in reduced revenues.
The city has 36 employees with 19 represented by Teamsters Local 856 and subject to formal bargaining procedures. The city’s Labor Relations Consultant, Greg Ramirez of the Industrial Employers and Distributors Association (IEDA), city personnel and Teamster representatives have been meeting to discuss options.
A three percent cost-of-living adjustment scheduled for this month will not be happening, and vacant positions, two in Parks and Recreation and one in Planning, will not be filled.
Parks and Rec received the largest decrease in revenue as classes and summer camps were reduced to a few virtual options. “We had to lay off our part-time and temporary employees when shelter in place first started,” said City Manager Steve Salomon. “Now, we have to make more cuts.”
Those cuts include a half-time management person as well as the remaining Parks and Rec management team going to 60 percent. According to Salomon, employees can use general leave (over time) hours to make up the 40 percent
reduction.
Additional lost revenue for the city includes less property transfer taxes due to fewer houses on the market and reduced sales tax.
“It’s hard to know about the sales tax with restaurants and retail operating in such a limited way,” said Salomon. “The state also told businesses they can defer sales tax, which helps local businesses but reduces our revenue.”
Salomon did note a possible silver lining with Contra Costa County’s tax pool for local online purchases. The city manager speculated more people are purchasing items online, which would also increase the county tax pool of which Orinda receives a share.
“Even though we don’t get much, it’s still something that might help us,” he said.
The City Council policy is to have six months of operating budget in reserve. That figure, however, already had fallen below the preferred balance due to additional costs for Sheriff Office personnel during the investigation of the murders over Halloween and COVID-19 requiring more police officers on the street. Some of those funds can be used for immediate city needs but more long-term solutions must be found.
The city staff will present a revised General Fund budget update at the July 7 City Council meeting with final decisions taking place at the council’s July 21 meeting.
