As more organizations’ worry about their bottom line, lack of city funds leaves little wiggle room for additional funding
The Cloverdale City Council unanimously approved its 2020-21 budget last week, with minor revisions to the budget that was initially presented to the council during its May 27 meeting.
“The budget does rely heavily on reserves this year,” City Manager David Kelley said. “We did end the previous fiscal year with a significant fund balance, however we’re estimating the use of about $900,000 in reserve funds which will significantly impact the reserve accounts.”
During the council’s May 27 meeting, Kelley said that the impact that COVID-19 has on the budget means that the city is anticipating a $938,319 general fund shortfall, $600,000 of which can be attributed to an anticipated decrease in COVID-19-related revenue.
Kelley said that, while the budget has a 31% reserve, the majority of the reserve funds are already in committed accounts, meaning the council and city have less wiggle room for budget adjustments going forward.
“I think we’ve estimated … approximately $400,000 in uncommitted fund balance,” Kelley said.
One of the things discussed at the previous budget meeting was how often the city would revisit the budget in the coming year, due to the tightened nature of city budgets due to COVID-19 and the unknown budget variables surrounding which accrued pandemic costs (like PPE) will be reimbursed and which won’t. While the council discussed revisiting the budget every quarter, Kelley said that the budget review will instead be a standing item on the city’s Police, Finance and Administration subcommittee.
Staff has done our best to forecast the impact of the COVID-19 emergency. We took a conservative approach, and we hope our numbers hold. Ultimately we hope, as a city, that we perform better,” he said.
Going forward, Kelley said that the city will be working on trying to obtain reimbursement funding from FEMA as well as the federal CARES Act.
“You look at the budget as an evolving budget that reflects the council’s goals and aspirations for the next year, but as we know more we’ll continue to bring that data back and refine the estimates on the revenue side and also on the expenditure side,” Kelley said.
Comments and changes
Councilmember Marta Cruz said that, when looking at the budget, she has concerns about some of the organizations receiving funds from the city. Namely, she said that she wanted to receive answers from the Boys & Girls Club about how the club intends to use the $10,000 that the city has allocated for them.
The funding for the club is part of a larger grouping of funds given to community organizations. Additional items include $1,000 for the history center, $12,000 for the Cloverdale Senior Multipurpose Center and $6,000 toward an emergency food program.
Mayor Gus Wolter said that the council can approve the $10,000 to the club, but require the club to do a presentation on where the money will go before the city authorizes the release of funds.
Additionally, Cruz wanted confirmation of whether or not the $65,000 allocated by the city for the Cloverdale Chamber of Commerce would be used to promote businesses who are members of the chamber, versus all businesses in Cloverdale. Chamber Executive Director Neena Hanchett said that the chamber has been promoting businesses regardless of whether or not they’re chamber members. She said that the chamber’s recently produced videos highlighting businesses have focused on chamber members, but that they can open them up to include non-chamber members as well.
Even with the $65,000 from the city and their anticipated revenue, chamber board president Ron Pavelka said that the chamber’s draft budget has them experiencing a shortfall of $20,000 to $25,000. He asked that the city increase its contribution to the chamber by $10,000, bringing it to $75,000.
Following the May 27 meeting, the city also received a request from Cloverdale’s Health Action chapter, which runs through the Cloverdale Senior Multipurpose Center, to up the amount given to the senior center from $12,000 to $15,000, with the funds split down the middle between the senior center and Health Action.
In response to the request for increased funding, the council questioned why Health Action funding tends to be lumped together with funding for the senior center, and voiced support for giving the senior center more funding than Health Action.
Councilmember Melanie Bagby said that she’s happy to consider the request, but would want to dig into it more at a subcommittee level, where they can gather more information about Health Action and how it intends to operate in the future.
“I don’t understand why we don’t give the senior center the money and let the senior center make up their mind whether or not they want to fund Health Action,” Councilmember Mary Ann Brigham said. “The senior center really stepped up to the plate this last year with food distribution and other things. I don’t think the Health Action should be funded as much as the senior center. The senior center seems to want Health Action there and to move in that direction, but shouldn’t that be their decision? Shouldn’t they decide?”
Wolter asked if the city has received any requests for funding from the Cloverdale Performing Arts Center (CPAC), which the city uses to hold council meetings.
“Because of the financial situation and the fact that we can’t have any income generating performances, we have laid off the whole staff,” Brigham, who also sits on the CPAC board, said. “We no longer have any staff there at all, including cleaners — nothing. We brought the cost down, but there’s alway still the basic costs of it. We discussed going to the city and asking for something, for more, but we decided with the lack of money for the city itself that we weren’t going to come and ask.
“We knew that probably until the end of the year, there is no way that we’re going to be able to safely reopen, so we’ve gone almost totally online … but it doesn’t make you any money,” she continued. “It’s the generosity of a lot of actors that usually perform there that they’re actually doing stuff now. How long is this sustainable? We’re trying to do projections, but if you can’t make any money, you can’t keep your doors open.”
Brigham added that with the addition of AB5, an assembly bill that extends employee classification to “gig workers” who would otherwise be paid as independent contractors, CPAC will have an even more difficult time reopening.
When it came time to deliberate, Vice Mayor Jason Turner said that he can’t vote to approve any increase in funding as requested by Health Action and the Cloverdale Chamber of Commerce due to the city already pulling nearly one million dollars from its reserves.
“Who’s to say that one quarter, two quarters from now, we won’t see an increase in our revenues … by the continuing opening up by the state or people becoming more and more comfortable,” he said. “I just see too much uncertainty to be able to offer the increases being requested right now.”
Turner added that if the city ends up having the funds to up their contributions to those organizations, it can be reviewed by the Police, Finance and Administration subcommittee.
“As much as I would like to support increases, I’m very skeptical about it all,” Cruz said.
Wolter said that he supports funding the additional requests from the chamber and Health Action, with the disclaimer that, should the city budget adjustments show a lack of funds, that they may not be able to provide the additional funding as requested.
“I’m in a position where I would rather under-promise and over-deliver, rather than over-promise and under-deliver. If we commit $75,000 to the chamber and they operate it into their budget and cannot fulfill it, there will be a cause and effect that cannot be anticipated right now,” Turner said.
The council went on to support the budget without any additional funding adjustments.