By Chris Frost
Oxnard-- The Finance & Governance took another look at the 2020-2021 budget preview, May 26, which offers a peek into the future mired with questions.
COVID-19 has wreaked havoc on the city budget, as the outbreak sparked a recession, and the city will use its reserves, most of them, to hold the line to the best of its ability.
The item sparked a lot of questions, but there is no budget in place yet.
Chief Financial Officer Kevin Riper said during the fiscal year 2019-2020, the city projected a $2 million operating deficit.
Currently, the city is in the midst of the recession caused by COVID-19. Oxnard is looking at an $11 million operating deficit because of revenue lost when the state shut down.
The city initially planned a status quo budget for the fiscal year 2020-2021, and now it faces another $9 million operating deficit unless it makes more reductions.
City Manager Alex Nguyen came up with $3.5 million of reductions this year, Riper said, but the city still faces an operating deficit of $5.3 million.
If the city is correct, and the forecast is true, Oxnard will have 2.5 percent of its total rainy-day fund left plus transfers out as of June 30, 2021. That total is below the city's policy goal of 12 percent
"The city manager and I are resolute in the belief that this is the time, in the middle of a recession, when you use your reserves," Riper said. "That's what they were put in place for, and that is the big picture."
Budget Manager Beth Vo reviewed the reductions over $100,000 and started with the City Clerk's department, where the calculated election cost for the 2020 election, means the city needs around $112,000.
"The net change for the city clerk is an increase that the department would need to carry out the election in Nov," she said.
The Community Development Department had changes in two areas, she said, in revenues and expenditures.
"On the revenue side, the department identified some one-time increases in building permit fees, as well as building receipts for Sakioka Farms that we have," she said. "It's approximately $300,000 in net changes. Along with that, the department also identified a decrease in activity, overall in fees and charges, as well as plan check engineering, cannabis fees, and zoning fees. That's a revenue reduction of about $448,000. Along with that, they also identified about a $50,000 reduction in code compliance administrative fees."
That means the Community Development Department will lose $193,000 in revenue.
The department currently has seven vacant positions, and they went through a prioritization process
"There will be a reduction in activities in the upcoming year," she said. "Based on that, they will forego the hiring of those seven positions in the next fiscal year. That resulted in a $744,000 savings in the general fund. Along with that, they also discovered minor reductions in overtime and temporary labor of about $17,000."
By freezing new hires, Vo said the city would need more activity on the contract side.
"We are asking for an overall net increase of about $120,000," she said. "There are various line items for contract check, building plan, document imaging review, and architectural and landscape coordination review."
When you factor in the hiring freeze with the contract labor, she said the overall net reduction in expenditures is approximately $578,000. The city will save $384,000 in total.
Oxnard Fire Chief Darwin Base said he has 14 empty firefighter positions, and he wants to reassign six of his current firefighters to fill those vacancies.
"Six of them will be reassigned onto engine companies, and that is a savings of $876,000 this fiscal year," he said. "The squad itself primarily focuses on EMS (Emergency Medical Service) calls in nature, so the paramedics would still function, but only on an engine company. The difference is now, where the squad went from EMS call to EMS call, now they're going to be on a multi-purpose vehicle, which is the fire engine."
The fire engine can commit to everything, including EMS calls, which is about 72 percent of the total calls.
"There's also a possibility that the paramedic, if he's covering the south end of town, will be tied up on another assignment,” Base said.
Riper interjected that although deploying the paramedic squad may save $876,000; there is a $1 million increase for station coverage and overtime.
"In the Feb presentation, I gave to the Finance & Governance Committee, and the full council in March, the finance and fire departments projected that it was going to overspend its fiscal year 2019-2020 budget appropriation by a little over $2 million because of overtime and station coverage," Riper said.
The overtime audit presented to the committee shows that the fire department's overtime is not out of line with other departments or best practices.
"It indicates the 2019-2020 adopted budget was a little low for station coverage and overtime," he said. "We are proposing $1 million of general fund money for next fiscal year to account for minimum staffing and overtime requirements," he said. "You take the $1 million we are proposing to add to the budget next fiscal year, subtract the $876,000 proposed for the deployment of the paramedic squad, and you have a net increase of $124,000 for general fund expenditures for the fire department."
Police Chief Scott Whitney said the department made cuts for the last 10 years and if the city cuts any more, it would mean less personnel in the department.
"Our proposal is to eliminate 17 positions within the police department, and 11 of them are sworn positions," he said. "Six of them are civilian positions. As you know, we have 249 sworn officers, and we have 28 vacancies. That's a high number for us. There is no way we can fill 28 vacancies in the next fiscal year, anyway. Our proposal for this budget is we eliminate 10 of those 28 vacancies."
The department has a long-term contract with several of the school districts, he said, but the Oxnard Elementary School District, because of its own budget cuts, can't continue their contract with the Oxnard Police Department.
"That contract is about $400,000," he said. "It pays for three school resource officers. That will be $400,000 less revenue the city will get. Because of that, and trying to find opportunities to make cuts, we have a full-time sergeant who supervises eight school resource officers. We're losing three of them, so those five officers be supervised by a patrol sergeant who does it on a co-lateral basis."
Whitney proposed eliminating the one sergeant position that supervises the school resource officers.
"There are six civilian positions we are proposing to cut, he said. "Unfortunately, because of human resources restrictions we have to follow, we are unable to talk to the affected employees. I can't go into detail on those, but three of them are vacant positions, three of them are filled positions. The filled positions, there are vacancies within the police department, so they'll be offered opportunities to go to other vacant positions. Nobody is going to be necessarily laid off with these proposals."
Va reviewed the public works cuts, and she said the department has several divisions, with the biggest one being the construction and design division.
"The department identifies about nine positions overall that would otherwise provide services to your construction and contract capital improvement projects," she said. "Just because they identified projects that are usually funded for the next three to five years, the department recommends that we shed about six of those positions."
She suggests shifting six of the positions, so they're funded by the utility fund.
"The utility fund will partially fund the other remaining three positions," she said. "The general fund will also partly fund those positions."
The shift will save about $994,000 in the general fund.
Two graffiti removal workers will shift to the environmental resources department. That will save about $151,000.
"The net change overall is $994,000 in reductions in construction and design and $151,000 in the public works general services area," she said.
Riper reminded the committee that the numbers could change, and at the last meeting, he gave the group a 50 percent confidence level projection.
"That does not mean that we are 50 percent confident the forecast is accurate," he said. "It means there is a 50 percent chance the forecast will prove too low and a 50 percent chance the forecast will prove too high. It's a middle of the road best estimate of where we think the revenue will end up this fiscal year and next."
Committee Member Vianey Lopez asked if they can get a full picture of where the revenue will come in and how borrowing from the enterprise fund looks on the budget.
"What will this budget look like to the community," she asked. "Using the example from last year, seeing certain services being cut and how our residents saw reduced service. What will this years' budget look like to the public?"
Nguyen said it's hard to predict what will happen.
"What we're doing with this budget is we're utilizing our reserves," he said. "This is the absolute appropriate moment to utilize our organization's reserves. We believe we can hold steady, but that can all change in the first six months of the new budget If we can hold steady here, aside from the reduction in services the fire chief described, everything can hold steady."
With all that said, he reminded the group that things are not too good right now.
"Our medians look bad; our streets are in bad shape, and our parks aren't being taken care of as frequently as we want," he said. "We're already at minimum services, as it is. What we're trying to do is not let it slip any worse, for now."
Committee Member Bert Perello appreciates the truthful update and mentioned that it could be worse.
"I appreciate the 50 percent concept and riding down the middle of the road," he said. "I would rather be a little bit over or under, then a whole lot over or under."
He's received phone calls asking how the city can be hurting if they can get $30 million from the enterprise funds.
Committee Chairman Tim Flynn reminded the group and residents watching that the enterprise fund loan of $30 million is for cash flow issues because money from the state money will be delayed because of COVID-19.
"We don't have a lot of money," he said. "We only borrow from the enterprise fund to meet our payment obligations until we get our payment from the state."
Riper said Flynn described borrowing from the Enterprise Fund accurately.
"It's only to keep the general fund from going negative because the sales tax doesn't come from the state because of the governor's deferral," Riper said.
Nguyen said the Enterprise Fund is not part of the budget yet because the voters must approve the item first.
"We're not there yet," he said.