COVID cuts into city budget

Projected revenues $846K less than pre- closure estimates

COVID cuts into city budgetBy BRIAN COSNER

News Review Staff Writer

Despite revenue shortfalls due to COVID-19 closures, “we are not going to have a deficit at the end of this budget cycle,” was the word from City Manager Ron Strand during last week’s budget hearing.

Strand presented an estimated revenues and expenditures for the 2019-2020 fiscal year as well as a proposed FY 20-21 budget to the Ridgecrest City Council. The city anticipates ending the current budget cycle with about $2.5 million in revenue over expenditures – most of which is from Measure V.

The proposed budget will utilize some $2 million of those measure V reserves for future law enforcement and public works projects, with an ending balance of $41,455 in the general fund.

“We are not going to be as far ahead as we thought we were,” said Strand. “But we have a balanced budget.”

In February, the Finance Department anticipated sales, Measure V, and transient occupancy taxes all to come in over budget to the tone of $531K. But after non-essential business closures and travel bans, those trajectories changed to a combined loss of $315K – resulting in a net decrease of $846,425.

Strand said initial estimates were even more bleak. But due to local shopping tendencies – and the high percentage of “essential” employees in the valley – spending remained comparatively strong.

Estimates for the next budget cycle show taxes generating about $92,318 less than what was budgeted for FY 19-20 – based on the assumption that stores and travel begin opening up by the end of June.

Hopes are high for the transient occupancy tax due to NAWS China Lake moving forward with its post-earthquake rebuild.

But the city has placed some $400K worth of projects, vehicle replacements and more road-related tasks, on hold in case those estimates don’t hold up.

“Luckily we were conservative on our last budget and have built something into our next budget in case our projections for this year are not correct,” said Strand.

In terms of economic development, the city has $60K budgeted to execute a land swap with the Bureau of Land Management for property near the Highway 395-South China Lake Boulevard intersection as well as an item to update the highway signage.

“Do we feel the $60K for the annexation is more important than the [withheld] items?” asked Mayor Pro Tem Lindsey Stephens.

“I think the land annexation is our future,” said Strand. “I think in the future it will be our lifeblood.”

Currently the city is not even visible from the Southern Hwy-395 turnoff, and Strand said that visibility will be critical for getting travelers off the highway and into Ridgecrest.

“We should have been building up there 20-30 years ago,” said Strand. “But we were the ‘secret city.’ As people were moved off base, they didn’t want to go too far. So they built their homes close to work.

“If you’re driving North on 395, there’s nothing that even says we have a hospital in town. Caltrans says we don’t qualify because we’re a rural highway – not a freeway. The next logical place for people to go is Lone Pine or Bishop.”

The proposed FY 20-21 budget covers some $18.7 million in general fund expenditures, 43 percent of which will be used for police services, 20 percent for road maintenance projects, 12 percent for Parks & Recreation, 8 percent for the Finance and IT Departments, 5 percent for Public Works, 5 percent for Community Development, 3 percent for the City Manager Department and 3 percent for other legislative costs.

While it still dominates general-fund expenditures, police services are down from recent years where it has been more than 50 percent of the budget – which is normal for Ridgecrest and comparable cities according to Strand.

The majority of the budget – 56 percent – will be used for personnel salaries and benefits.

Inter-fund transfers and capital projects represent 20 percent of expenditures, 18 percent for services, 2 percent for materials, 2 percent for capital, 1 percent for Individual Service Funds and 1 percent for debt service.

Personnel expenditures include two new wastewater pretreatment inspectors and a budgeted promotion from Police Clerk II to Records Supervisor, but otherwise no bonuses or cost-of-living increases.

Pictured: City Manager Ron Strand — News Review file photo

Story First Published: 2020-06-12