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By Chris Frost
Tri County Sentry
Oxnard-- The city council, Tuesday, June 15, held a public hearing on its upcoming Fiscal Year 2021-2022 budget.
The new budget, presented at the Tuesday, June 1, city council meeting, outlined many programs that will be restored, along with adding staff and restoring lost police programs that were consolidated during the city's financial crunch.
The budget has one pothole, the IUF ruling, that City Manager Alex Nguyen said he had no issue with and occurred before he arrived.
Nguyen asked the council to authorize the interfund transfer of $7 million in the upcoming budget from the street and maintenance fund, and the funds will be used to pay back, in proportionate amounts, the three utilities.
"There is a consequence to that, and that is $7 million less the city can put into the street and maintenance budget," he said. "Thank goodness we have other funding sources, so we'll really be able to make good progress on the streets. Part of the reason why I recommended this budget is because it was funded from the IUF."
During public comments, Douglas Partello said he noticed on the line item for parks and open spaces; comparing the current year to the upcoming year, the item shows a $700,000 reduction.
"The city manager made some recommendations and made a presentation on the upcoming budget and made a presentation that it would be increased by $5.6 million," he said. "I don't know if there is something I am not understanding, or a clarification needs to be made on that," he said. "I also noted on a line item from the CFO's presentation on traffic and road improvements. It showed the same figure, $2.2 million. That was no change, and I know the city council has committed to upgrading the PCI (Pavement Condition Index) to a 70. If my memory serves me correct, that would be an additional general fund contribution of $14.6 million, times three years."
He also said he understood the gas tax for road improvements stands at $31.8 million.
"There's a slight bump on the estimation for Measure E, so that's a little over $50 million," he said. "In our budget now, our revenues are increasing by $66.2 million. Then we've got the $31.8 million from the gas tax; then we have the American Recovery Act money. I'm curious why that figure was the same or if there was a change there."
Thomas Cady commended the residents for voting for Measure E and noted without the funding, everyone would be having a much different conversation.
"I listened to the presentations by the city manager and the finance director, and I think it's important for the community to remember that we didn't get into the current fiscal challenges that we're in over one year," he said. "It was over a number of years, from the great recession on, we never really recovered from that. A lot of people think our current problems happened in the last couple of years, but they were a long time coming. Now, we have the ability to right the ship and move forward. I commend the city manager on the three-year plan of incremental rebuilding, and it would be important for the public to remember that we're not going to see everything fixed in this first fiscal year. There are a series of incremental improvements that will happen that will benefit Oxnard and our residents."
After the public hearing, City Manager Alex Nguyen commented and recommended one budget change he called serious.
"The budget videos are online, and there are only 30 views," he said. "Unfortunately, half of those views are department directors, as well as the council members. Probably more than half, so it's disappointing."
He said people have brought up during public comments and otherwise what's happening with the American Rescue Plan Funding.
"In July, at the committee and the council meetings, we will have public discussions about preliminary discussions about how to invest the American Rescue Plan funding," he said. "August is when the federal treasury department is going to issue its final guidelines. We want to make sure before the council makes decisions on that funding, we have all the rules in place."
The final decisions on American Rescue Plan Funding will come in December after the committees discuss the item.
"This is a very positive budget," Nguyen said. "It's the first time in a long time that we've had such a positive budget. I appreciate one of our public speakers, Mr. Cady, who took the long view about where we are right now. It's been probably a decade since the city hasn't been facing cuts, reductions, or layoffs. It's important to remember, as you're discussing the budget where we've been and also how far we've come."
He said if people think about the last 10 years, there has been a lot of turmoil in the organization and city.
"Just in the short time that I've been here, I recall my first budget that I introduced to this council; I recommended $9.2 million in cuts," he said. "We laid off 30 staff people; we made significant reductions to services and programs, and we closed a couple of popular facilities. Those were difficult decisions for the council to make at that time, and it was only three years ago."
He said the city continued with a weak budget for another year when the pandemic hit, and the city was hoping for a status quo budget at the time.
"Thank goodness for Measure E," he said about the proposed budget. "The voters trusted us with this additional revenue, and now we finally have the ability to turn the organization and the city around. As some people have stated, it's not going to happen overnight. It can't happen in a short number of years. This is why I consider it to be the first of three restoration budgets. It's important to recognize where we are as of today."
As the city looks toward getting the first Measure E payment at the end of June, he said it's important to recognize where the city is.
"Just because the voters approved Measure E, it doesn't mean everything is better," he said. "It means everything is going to get better."
During council comments, Mayor Pro Tem Bryan Mac Donald thanked the staff for supporting the budget effort.
"I've been working in this city in one form or another since 1977, and I have been through this exercise a few times," he said. "It has not always been easy. In fact, at times, it has been painful. It's always a sad day to tell somebody you've worked with that you don't have any money for their position. You can see the tiredness of the community due to all the budgetary cuts. Wooley Road, I drove down the other day, and it looks abysmal."
He noted that the city is seeing the light at the end of the tunnel.
"I'm convinced it's going to get brighter," he said. "I feel better about this budget than I've felt about a lot of budgets over the years."
Council Member Gabe Teran echoed MacDonald's comments and thanked Chief Financial Officer Kevin Riper for assembling the information.
"I know that's his role, but I hope the public knows how fortunate we are to have a professional like Mr. Riper put this together and present it to us in a way we can look at and form a decision we are making as a community and council," he said.
Council Woman Gabriela Basua also thanked the finance staff and said she knows it takes a lot of time and energy to put the city's budget together.
"Mr. City Manager, you are asking that we go ahead and authorize the reduction from the street maintenance fund, which is currently suggested at $14.6 million," she said. "You want us to reduce that by $7 million?"
"That is correct," Nguyen said.
In the current budget, Basua said the city currently has $11.5 million budgeted for the streets.
"Cumulatively, it's going to be about $7 million less," Nguyen said. "Part of the reason we're working this through the CFO is that we anticipated in the current fiscal year a $5 million payment. We were going to the court and asking for the payment schedule, and we were hoping for $5 million and charge it over seven years. Now with the court's ruling, we'll bring that item on the council's next agenda."
Basua called it a great budget.
"We are looking to reduce the street maintenance lower," she said. "I support this, and it's important that we pay the fund back, and we have a plan."
Councilman Oscar Madrigal asked if the city's gas tax will be affected by taking the money to repay the IUF fund from street funds.
"There is a natural requirement associated with RMRA (Road Maintenance and Rehabilitation Account) funding," Public Works Director Craig Beck said. "It's the gas tax the city receives under SB1. That matches $4.5 million, and it varies from year to year. We still have money committed through the Measure E allotment and CAP allotment to meet that matching requirement."
Madrigal said things look great, but always to be cautious.
Mayor John Zaragoza said the budget is a roadmap, and they adjust it accordingly.
"The $7 million being transferred is staying in the city," he said.
Councilman Bert Perello said the budget is the most impressive document he's seen since he became part of the council.