Council reviews surprise surplus
CHICO » Some good news about Chico’s financial future came from city staff in a long-awaited review Tuesday night presented to the Chico City Council.
However, reaching decisions on many other major issues, particularly on using funds to address homelessness and affordable housing strategies, had to be postponed until the next meeting due to the length of the discussion.
Although the city’s budget proposal was approved earlier in the year, City Manager Mark Orme had promised a full review of the city’s budget and current quarterly impacts of COVID-19 for the council for October, and this review took precedence over other issues for the evening.
Grace Community Church Pastor Bryan Meyers opened the council meeting, welcomed to pray for the meeting before the
Pledge of Alliance took place.
Ashas beencommon formostof the year, nearly all public comments were about the city’s handling of homelessness, Bidwell Park and housing availability. CouncilorKarl Oryaskedthat thecouncil removea report from the Housing Committee, delayed since April, due to being doubtful to reach it “at a sensible hour.” That meant no report from the committee about housing would be reviewed untilOct. 20.
In the city budget review discussion of the evening, despite an ongoing housing availability issue Community Development Director Tony Lindsey did note construction of housing “way up” for the year in comparison to previous years, building “more than double” the average rate of multi family homes.
The council was first asked to consider fee increases to be incorporated in the city’s fee schedule with a public hearing conducted specifically to address proposed cost of living increases to Development Impact Fees. The report specified “the city manager is directed to increase development impact fees annually on July 1” in particular to “reflect the increase in employees compensation rate.”
Ultimately, the council approved of these fee increases by 5-2, motioned from Ory with a second from Councilor Scott Huber. Mayor Ann Schwab said, “We’re raising the fees now because this is what it costs the city now to … do this business.”
Budget surprises
Orme said a “sharp focus” is needed to tackle the financial challenges the city faces, but revealed no reductions will be needed among staffing with unexpected higher revenues seen in the budget after reviewing the current progress before June 30.
Eight presentations then followed from each department head.
Dowell had revealed in weeks prior that revenue surpluses have been seen, and the budget is looking better than anticipated earlier in the year, due to these unexpected higher revenues.
“Wewere thinking a 40% (revenue) reduction in the second quarter … in reality it was about a 14% deduction,” Dowell said.
The forecast for June 30 released Dec. 31, 2019, was originally $ 130,865,902, but the actual amount seen June 30 was $136,725,148, reflecting a one year change of $30,194,166.
This unexpected surplus prompted a recommendation from Orme to fully fund operational and emergency reserves for the city. Dowell even said in his six years with the city, “This is the best I’ve seen our books.”
While Orme asked that leadership “maintain the financial prudence that has gotten the city to this point,” he said a quarterly budget check in is recommended with current hesitance as “candidly we don’t know what this third quarter is going to end up at.”
However, as the discussion took over two hours, Councilor Sean Morgan criticized allowing each department to present if no reductions were needed. Orme said the length of time could be adjusted due to the amount of items to be discussed.
Among the most depleted departments according to staff, Public Works Maintenance was cited as particularly lean with approximately $14 million per year of unfunded needs formaintenance. Further cuts would impact service delivery and add to long term costs, the department reported.
However on the Engineering side for Public Works, 2020 was cited as the largest year in Chico history for construction at $17million to local contractors.
Fire Chief Steve Standridge said pre- disaster planning is still needed to cover lean staffing reserves with past and current disasters inmind. His department faced a “very challenging” year due to tight staffing in 2019.
As the department with the most employees in the city, Chico Police Department Chief Matt Madden had in February requested the city consider additional funding for training ($80,000), overtime ($ 40,000), hiring a new evidence clerk and over $ 18,000 for background check investigation. Madden said domestic violence referrals, an issue ViceMayor Alex Brown requested discussing, need consent for proper response and teams are being trained
to respond to different types of situations.
Overall, as no reductions were yet needed, Orme said staff is “cautiously optimistic,” but will return to review the third quarter in Jan. 2021.
Other business
All consent items for the night were pulled, and due to the length of time needed for discussing the budget review, all other items had to be continued to the next meeting.
This included the controversial proposal from Orme for the revised “Quality of Life” plan, a new version of the Homelessness Solutions plan for tackling city homelessness discussed Sept. 22. The council voted 5-1 (Councilor Randall Stone against, Huber absent) to postpone the coming items after the budget review portion.
Among the postponed items were also Schwab’s interim report from her policing advisory committee which has been meeting twice a month since July housekeeping for conflict of interest in the municipal code and a report from the housing committee delayed since April.
The council did consider a public hearing and appeal of the staff decision about application of sewer fees by the company NorthStar, represented by Jim Stevens. The council voted 7- 0 to table the discussion until Nov. 3 to allowthe appeal to bring back more materials for discussion.
The next meeting of the council will take place 6 p.m. Oct. 20 in the City Council Chambers at 421 Main St.