CALEXICO — After several budget workshops and a presentation to the city’s appointed financial advisory committee, the Calexico City Council was expected to approve an austere but balanced fiscal 2020-2021 budget this week that includes the most conservative of revenue estimates possible due to the economic effects of the COVID pandemic.
Although the council meeting was to occur June 3, which is after this newspaper’s deadline, the passage of the budget is pretty much expected following a final special budget meeting May 28 in which the council all but agreed that the balanced budget would be a formality.
Most of the heavy lifting had been done during earlier budget workshops with city department heads, all in the public’s view through livestreamed special meetings to make the process more transparent, something that had been Calexico City Manager David Dale’s goal after the current budget was hastily passed at the last minute due to its late preparation in summer 2019.
The May 28 meeting was unique in that it was the final step that would allow for the balanced budget to be passed with additional expenditures attached. A total of $2.2 million in budget augmentation requests from individual departments were approved in theory but absolutely contingent and tied directly to new or additional revenue being realized throughout the 2020-2021 budget year, which starts July 1.
City Finance Director Karla Lobatos said the new money would not be “released until the revenues are realized,” and news of those releases of money would likely happen during quarterly budget updates to the council, she said May 28. Cities get their sales-tax revenues and earnings reports on a quarterly basis.
On the June 3 agenda is a balanced revenue-expense-neutral total proposed budget of $108.74 million, which includes operating expenses of $47 million and a capital improvement program (for roads and other major infrastructure projects) of $61 million. It also includes a general fund of $16.44 million.
The general-fund budget is the city’s chief operating fund from which most of its salaries and benefits and the lion’s share of operational costs are derived, paid for through sales and property taxes and local program revenues, like citations and city fees and other applicable taxes. The larger amount of the budget (non-general fund) is often tied to grant-funded expenses and state and federal program revenues.
More than $377,000 in budgeted city program revenues were lost due to the current COVID-19 pandemic and city officials expected to see a sales-tax revenue reduction for the current quarter of around 15 percent due to the closure of nonessential businesses for the end of March, all of April and much of May. The revenue from Mexicali shoppers was also greatly reduced with a federal travel restriction in place during the same time frame.
The June 3 budget resolution was to include the fact that the $2.2 million in added expenses is contingent on if and when the revenues come, all of which depends of how quickly the city bounces back from losses incurred by the COVID-19 pandemic and whether one-time potential revenues come through like city administration thinks they will.
During a May 7 proposed 2020-2021 budget presentation, the first time the proposed budget was made public, Lobatos said city consultants think Calexico will see at least $250,000 in additional sales-tax revenue in fiscal 2020-2021 that is not even being factored into the proposed balanced budget going before the council June 3 in case COVID conditions continue to affect the economy.
Also, Dale said May 28 the city is confident that a number of one-time revenues that will help pay for needed one-time expenses and bolster reserve accounts will materialize. He said one-time revenues include things like the sale of city-owned properties and grants, among other things.
“Nothing is set in stone, but it looks like it’s really going to happen,” Dale said. “In that case, my advocacy would be to take off a portion of that funding that comes and help pay for some desperately needed one-time new things that have been identified by some of our department heads.”
He added, “If the revenues come in higher, a good portion should go to reserves. We should have at least $4 million in reserves.”
Dale said a city should have enough operating expenses to be able to pay its bills for four to six months. The austere proposed budget would have enough in reserves to pay for one month with zero revenue.
Of the $2.2 million in augmentations being proposed, $1.952 million is for the general fund and the remainder, around $260,000, is enterprise funding tied to the functions of the water and waterwater systems and the airport. As such, the $260,000 is more or less going to be available and the $1.952 million is more volatile, hinging on sales and property taxes and local program revenues and fees, and the one-time revenues Dale mentioned.
The $1.952 million includes:
$620,000 in requests from the Police Department, which includes a full-time dispatcher, office equipment and new bulletproof vests, new handguns and rifles, and some minor building repairs. The bulk ($400,000) comes from five police vehicles and one animal control vehicle
$697,000 in requests from the Fire Department, which includes salaries and benefits for three new firefighters totaling $299,158, a new ambulance at $187,000, two other vehicles at $70,000, additional building repairs, a new radio and a bulletproof vest, personal protective equipment (PPE), and additional training
$439,000 for the Public Works Department, which includes $172,780 for parks, for laborers, expenses, and equipment. Some $115,800 facilities staff and equipment, $61,000 in fleet expenses, and $89,400 in administrative costs, including some part-time consulting hours for engineering and project management, and equipment
$187,000 for the library for staff and building maintenance
$40,700 for recreation for temporary staff and operational expenses at the Carmen Durazo Cultural Arts Center
$31,600 in budget request reductions to be credited to the Finance Department for giving up a records clerk position and a full-time code enforcement officer.
Watch the Calexico Council Meeting Online
Livestreamed June 3, the recorded Calexico City Council meeting will be available to watch online on the city’s website on June 4 on calexico.thepublicspectrum.org/ and as well as the city’s Facebook page.