Online sales boost City of Lodi’s revenues through pandemic

Budget in better shape than expected at mid-year review

Thanks to increased revenue projections, the City of Lodi could fill six vacant police officer positions during the next fiscal year.

Assistant City Manager Andrew Keys told the Lodi City Council on Wednesday that the six positions were frozen last year, just as the COVID-19 pandemic gripped the world.

Keys said it was assumed that when the pandemic began last March, city revenues would decline drastically at the start of the 2020-21 fiscal year. That would be followed, he said, by a long road to recovery economically.

“We didn’t know where we were going to be (financially),” Keys said. “We took a conservative approach to the decrease, which is an aggressive approach when you think about it, in terms of the city’s finances. Based on the solid work of council and staff in building reserves, that put us in position where we could afford to wait and see which services really needed to be reduced.”

The city’s economy was not impacted at all, as revenue continued to flow into its general fund, he said.

Last June, the council approved a budget that included $59.16 million in the city’s general fund. On Wednesday, staff projected a general fund revenue total of $68.3 million by the end of the fiscal year.

Filling those six frozen police officer positions will cost $744,000 annually, Keys said. However, the cost during the final quarter of the current fiscal year would be $186,600.

Because of the increased revenue, staff also requested the addition of a new public information officer, at a cost of $140,000 annually, as well as a new administrative assistant in the community development department. That position would cost $82,200 annually, Keys said.

The two positions would cost $35,000 and $20,500, respectively, during the final quarter of the current fiscal year, he said.

As stated during two previous budget updates, Keys said the driving force behind stable revenues was the city’s general sales tax, funded for the most part by online sales.

Last summer’s adopted budget had general sales tax estimated at $12 million, and city staff is expecting that to increase to more than $13 million this June.

When Lodi residents shopped online at Lodi businesses, the city received 100% of the halfcent sales tax designated for Measure L, Keys said.

That half-cent tax is anticipated to generate nearly $7 million for Measure L, up from $5.5 million predicted in last summer’s budget approval.

Only two departments are expected to end 2020-21 with lower revenue funds than originally anticipated last summer, and Keys said they were the two hardest hit by the pandemic.

Parks, Recreation and Cultural Services was expected to end this fiscal year with $7.6 million, but staff now projects a total of $6.1 in revenue. In addition, staff anticipated revenues of $1.6 million for the Lodi Public Library, but that projection has been reduced to nearly $1.49 million to end the fiscal year.

“Hutchins Street Square has been closed,” Keys said. “That is the largest revenue generator for the parks department. Programming there has been nonexistent. You can’t have events or indoor venues, and we haven’t been able to for the entire fiscal year. We’re still not in a COVID tier that would allow that in the foreseeable future.”

According to the state’s Blueprint for a Safer Economy, concerts will not be permitted until a county is in the yellow and least restrictive tier. San Joaquin County remains in the purple tier, though the county is expected to advance to the red tier in the coming weeks.

Concerts may not be held at Hutchins Street Square until 2022, PRCS deputy director Cathi DeGroot said last week.

Keys added on Wednesday that the library has been closed for the entirety of the pandemic, and while it has offered curbside pick-up at various times during the year, it hasn’t been able to generate enough revenue for operations.

As a result, the city has not spent a great deal of money on it, he said. Expenses at the library were expected to be $1.7 million this year, but mid-year projections have reduced that to $1.5 million by this summer.

Expenses in the parks department are also expected to be lower by the summer at $6.16 million, down from $7.7 million approved last June.

Overall general fund expenses are anticipated to be $66.3 million, up from $59.7 million last summer.

Former councilwoman JoAnne Mounce was happy to see the city propose filling six police officer positions for the coming year, but urged staff to hire more code enforcement officers.

While the city has made great headway repairing infrastructure and replacing dilapidated alleyways, she said, it has not been able to reduce blight, particularly on the east side.

With two current officers, code enforcement was the most understaffed department in the city, Mounce said, adding she has been asking for additional positions for the last decade.

“I think it could make a huge difference to the blight on the east side,” she said. “And we all know that if you allow blight, it invites crime and it invites drugs. So the city can clean up all it wants to, but if you don’t have code enforcement that works on your housing stock and those people that don’t want to follow the rules of the city, then you’re going to continue to have the blighted conditions on the east side that we have for decades.”

City Manager Steve Schwabauer said a third code enforcement officer position has been budgeted for the 2021-22 fiscal year, and staff is currently working on options for the council to consider a fourth officer in the future.

The Lodi Police Department will present options for that fourth potential code enforcement officer at a shirtsleeve meeting in the next few months, he said.

“I think this (budget presentation) was well researched, and very reasonable,” Mayor Alan Nakanishi said. “This is essential and fiscally sound, so I’ll be voting (yes) on it.”

The council unanimously approved the budget adjustments Wednesday.