Nevada City to halt infrastructure projects next year
During a Wednesday budget workshop addressing the financial impacts of COVID-19, the Nevada City Council directed staff to move forward with a 2020-21 budget that freezes five vacant public safety positions and puts major maintenance and infrastructure projects on hold next year.
The council was presented with three options for mitigating the financial effects of the pandemic next year, which is projected to cut into sales taxes, transient occupancy taxes, parking meter funds, parking citations and recreation revenues. The council directed staff to pursue the moderate scenario. The budget will go before the council for approval during its June 10 meeting.
The more drastic scenario would have also instituted a one-day per pay period furlough, shutting down City Hall every other Friday. The more optimistic scenario would have only frozen the positions and made cuts to the city attorney and parks and recreation budgets, though maintenance and infrastructure projects would have continued.
The council will receive monthly updates to make sure the city is meeting budget projections and course correct if necessary.
“Things aren’t just changing monthly or weekly, they’re changing daily,” Mayor Reinette Senum said.
The council also provided direction for amending this year’s budget, which is projecting a nearly $70,000 deficit.
According to City Manager Catrina Olson, an unexpected factor in the deficit was workers’ compensation costs, which were about $55,000 more than budgeted. Olson said the city will use reserves from previous workers’ compensation pool savings in 2008-09 and 2009-10, and apply that to make up for some or all of this year’s deficit.
While the city retains reserve balances in some of its funds, Olson said the water and sewer funds have been operating on a thin margin for years. While their operations are funded through ratepayer payments, necessary capital projects are not funded, which can leave a deficit.
The city was considering putting a measure on the ballot this year to expand its Measure S sales tax — planned to sunset in 2023 — to include capital outlay projects in addition to the public safety expenditures it currently funds. However, now officials are wondering if even those additional funds will be enough.
“The question is: Is Measure S what we’re going to work on getting on the ballot this year, or do we need to look at something possibly different based on the recovery from this pandemic situation?” Olson questioned.
To contact Staff Writer John Orona, email firstname.lastname@example.org or call 530-477-4229.
|FY19-20 comparison||$39.5k or 1% increase||$224.5k or 4.6% decrease||$367.3k or 7.5 decrease|
|Major Changes||Increase in pension costs offset by decreases in City Attorneys budget, Parks and Recreation, and freezes to 2 full-time and 3 part-time Police Department vacancies.||Previous cuts stand, plus department-wide operational budget decreases, including any capital outlay and major maintenance projects||All previous cuts remain, plus a one-day per pay period furlough for all departments except Police due to vacancies. City Council would close every other Friday.|
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