Expecting a significant loss of sales tax revenues for this fiscal year and the next, San Juan Bautista is preparing to cut costs during the coronavirus pandemic. City Council members discussed options at its April 28 meeting including issuing furloughs, eliminating staff positions and reducing service contracts. No action was taken.
City Manager Don Reynolds said San Juan Bautista estimated in early April a loss of about $190,000 per quarter, about 50% of the general fund. He added that while the city expected the revenue loss to be short-term, the League of California Cities estimated it will last about three years. It took San Juan Bautista 37 months to recover from the 2008 recession, Reynolds said.
The first analysis was conducted on full-time staff positions such as associate planner, currently held by Todd Kennedy, and accounts payable, which is vacant.
“Associate planner has been reassigned as a disaster services worker,” Reynolds said. “There is a limited amount of work that can be done in that capacity.”
San Juan Bautista hired Lizz Turner in April as a community liaison for 20 hours per week for as long as the city is in a state of emergency. Reynolds said her position is eligible for Federal Emergency Management Agency (FEMA) reimbursement.
Part-time positions under review are the public information officer, which has also been reassigned as a disaster services worker, and two public works positions.
Reynolds said he has gone back-and-forth on eliminating the two public works positions because it’s only $1,200 to $1,500 per month per position.
“Not much for what we get for the buck,” Reynolds said, adding the city might consider eliminating only one position rather than both.
Reynolds said the city must also assess its contracts that include fire and law enforcement services, private security, a certified public accountant, legal counsel and building/engineering services. Because 4Leaf Inc., San Juan Bautista’s contracted engineer firm, is covered through impact fees paid by developers, it would not impact the general fund.
Reynolds also said the city has not used all its budget for legal counsel because the need has been less than anticipated. The city hopes to reduce the contract by $20,000 per month.
For security, one option is to reduce Level 1 Private Security services to weekends only, which would reduce the city’s cost by $14,000 per month. San Juan Bautista approved a three-year contract in July with the security company, which included a 75-cent-per-hour raise. The city allocated $110,000 for that in the 2019-20 budget.
With the recommendation that includes eliminating both public works positions, the city would reduce its costs by $64,000 per month, or $768,000 a year. He said this would cover the $700,000 projected deficit.
The proposal, if approved by the City Council, is expected to take effect June 1 and be implemented through the 2020-21 fiscal year.
“Whether we make the decisions as I’ve put out to you, I put out some recommended solutions, it’s up to the council,” Reynolds said. “But we want a little wiggle room going forward because our Local Agency Investment Fund—if that interest rate goes down, then we’re going to be back on a deficit mode again.”
Council members discussed giving any laid off employees priority when the city looks to fill the position again. Councilwoman Leslie Jordan said there are additional cost-reduction opportunities in having city employees perform jobs in water and wastewater services that don’t require special certification, but Reynolds reminded her that those services are funded by the Enterprise Fund.
Jordan also said she was “nervous” to reduce the Level 1 Private Security contract considering instances in which residents violated the shelter-in-place order by playing football at the park two weeks ago, as well as the drive-by shooting on April 1. The rest of the council agreed with Jordan’s concerns.
She said the company has “significantly reduced crime” since coming on board.
“Before they came on we had a horrible crime spree. Margot’s, Mission Cafe have been broken into several times. We have not seen that since they’ve been here.”
Jordan recommended extending Level 1’s responsibilities to help with code enforcement. City Attorney Deborah Mall said it was a possibility, but first the city needed to discuss the matter with its insurance carrier Public Agency Risk Sharing Authority of California.
Resident Jackie Morris recommended the city speak with property owners where Level 1 does most of its patrolling and have them share the city’s cost for the security company.
Councilman Dan De Vries was not in attendance.
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