The midyear budget adjustments will affect many departments within the city of Pacifica as the municipal government grapples with a shortfall that approaches $1 million.
In the midst of a pandemic, the general fund budget is $863,000 in the red, with revenues lower by $952,000 and expenditures lower by $88,400, said Tina Wehrmeister, assistant city manager.
“We have some challenging news and recommendations to balance the budget,” said City Manager Kevin Woodhouse. As a result, City Council approved budget balancing adjustments at the Feb. 8 meeting:
- Appropriate $335,600 of “excess ERAF” revenue to cover the remaining deficit and transfer the remaining $1.46 million to the disaster accounting fund. The acronym stands for Educational Revenue Augmentation Funds, and refers to a state law that shifts some property taxes from schools to other agencies.
- Appropriate an additional $250,000 from the disaster accounting fund for Beach Boulevard seawall repair.
- Decrease general fund appropriations from $36,971,000 to $36,882,623 to reflect changes in projections.
- Appropriate $195,000 from the facilities reserve fund for temporary Civic Center relocation.
- Appropriate $595,000 from a street fund for the slurry seal project on Terra Nova Boulevard from Fassler Avenue to Oddstad Boulevard.
- Use $115,000 in the motor pool fund for priority fleet repairs and a motor pool operations study.
- Approve $110,000 more in legal fees from an estimate of $40,000 to $150,000 for legal assistance related to the city’s equalization basin project. Funds will come from the sewer charge fund.
- Use $528,000 in child care reserves to balance the program’s shortfall.
General legal services increased to $300,000 due to labor relations, the Measure F lawsuit and COVID-19 fluctuating rate adjustments, Wehrmeister said.
Public Works costs increased by $85,000 to repair the fence at 2212 Beach Blvd. and to repair the heating and ventilation system at the community center, said Wehrmeister.
“The pandemic continues to impact the economy, making financial forecasting challenging. However, the city’s financial experience from July to October 2020 provides a better basis for forecasting the remainder of the fiscal year than last spring at the outset of the pandemic,” Wehrmeister said.
General fund expenses increased in the general government category
by $345,447, from $4,719,000 to $5,064,447, for the Police Department by $169,441, from $10,176,000 to $10,345,441, due to overtime expenses brought on by vacancies and absences due to injuries, said Wehrmeister.
The Fire Department budget increased by $277,000, from $6,393,000 to $6,670,000, and the Public Works Department by $85,000, from $4,389,000 to $4,474,000. The Planning and Building Department budget remained the same at $3,771,000.
Parks, Beaches and Recreation Department lost $1.6 million in revenue to bring its budget to $4,116,735. The reason: a decrease in program attendance due to COVID-19, Wehrmeister said.
Pacifica’s vehicle license fee shortfall as anticipated from the county may be $1.2 million. The city expects to refine those numbers later this month. A state backfill may lag up to two years, said Woodhouse.
Sales tax revenue is expected to be $4,486 above budget, due to online purchases, Wehrmeister said. Perhaps surprisingly, transient occupancy tax is higher because the city is collecting TOT from short-term rentals, however the adopted TOT budget going forward is 42 percent lower due to COVID-19 impacts, Wehrmeister said.
City Council members had questions.
“Where are the repairs to the pier?” asked Councilmember Mike O’Neill. Woodhouse replied the pier is being assessed to figure out a good course of action and cost for repair, but the seawall breach is in this year’s budget.
Mayor Sue Beckmeyer asked if Pacifica can expect any stimulus from the state or federal government to address these fiscal shortfalls.
Woodhouse replied, “Nothing specific. We don’t know what form it will take.”