Despite increased tax revenue, including an additional $700,000 in Measure S dollars, Crescent City struggles to recruit | Wild Rivers Outpost
Jessica Cejnar Andrews / Thursday, March 10 at 2:59 p.m. / Local Government
Despite increased tax revenue, including an additional $700,000 in Measure S dollars, Crescent City struggles to recruit
Although tax revenue, particularly for Measure S, was higher than expected, staff turnover and recruitment challenges prompted Crescent City Council to cut the city’s budget for salaries and benefits. for the first half of the 2021-22 financial year.
Acting on the advice of Chief Financial Officer Linda Leaver, councilors also on Monday approved a one-time payment of $143,000 from the city’s general fund to its water fund. According to Leaver, this makes the water fund whole following a loan he gave to the Crescent City Redevelopment Agency for a project circa 2008.
Since California disbanded redevelopment agencies statewide in 2012, Crescent City’s successor to its redevelopment agency has paid off about 80% of that loan. However, the state required its successor agency to use the remaining 20% for a low-income housing project instead of putting it back into the city’s water fund, Leaver said.
“City staff have supported this for some time because we strongly disagree that it should be that way,” she told councillors. “We consulted with our city attorney and outside legal counsel as well as an expert from the successor agency and were told, ‘We hear you. We understand your reasoning, but this has already been the subject of litigation. Other agencies have taken this to court, so you have virtually no choice. “
Leaver recommended reimbursing the water fund from the general fund to ‘make the water payers whole’ – something councilors agreed with.
“Making the water fund whole is a long process,” Councilor Blake Inscore said. “For us to put $143,000 back into the water fund, we’re putting that in to serve our taxpayers and it’s the right thing to do.”
On Monday, Leaver said due to an increase in local sales tax revenue, she was recommending an increased revenue projection of $175,000.
Separating proceeds from Measure S, the city’s 1-cent voter-approved sales tax increase in 2020, Leaver said the city saw a larger increase of about $700,000. Staff initially expected Measure S to generate approximately $1.3 million in revenue. On Monday, however, Leaver said revenue was closer to $2 million.
“That $1.3 million budget was based on analysis done before COVID when we were starting to talk about going to voters with this,” she said. “Now we’ve had, obviously, a few years since then and our results are better than expected. They are much closer to what our regular sales tax (is). »
Another major source of revenue for the city’s general fund, the transitional occupancy tax, is also $400,000 higher than expected, according to Leaver. That’s more than $360,000 than the city “normally would have been at this point in the year,” she said, adding that the total TOT revenue for the general fund is 1, $8 million.
To adhere to the council’s stated policy of reviewing the city’s budgeted expenditures and contributing 25% to the general fund, Leaver said the council should set aside $2 million.
“If this budget amendment is approved, and if everything for the next four months goes exactly as planned, which it never does, but if it did, we would end up with $4 million in the general fund. “, she said. “Of that $4 million, $2.1 million must be set aside to comply with this policy. There’s just over a million dollars extra related to measure S, so that’s also set aside because those funds need to be spent on activities specifically for measure S. If this budget amendment is approved and if everything is going exactly as planned for the rest of the year, $847,000 is what would be left over at the end of the year above what is set aside for measure S and the general fund reserve.
Measure S dollars were allocated to transition Crescent City Fire and Rescue to a hybrid fire department; allow the Crescent City Police Department to maintain its workforce; repair roads and potholes; and keep the Fred Endert municipal swimming pool operational.
To address staffing shortages, Leaver suggested several changes. One was to transition a part-time attendant at the city’s Lighthouse Cove RV park to a full-time position three days a week. That cost is covered by other vacancies, but Leaver said if the position was still needed next year, it would cost about $4,650 per year.
Leaver recommended converting part-time lifeguard positions at the Fred Endert Municipal Pool to full-time positions. This is due to an increase in swim lesson attendance fueled by a donation from the Del Norte Healthcare District to the city. With a full staff, Leaver projected it would add $18,500 to the city’s pool expenses.
Leaver also mentioned upcoming projects at Beachfront Park and the need to increase staff to prepare for them. She recommended changing a seasonal park maintenance position to a full-time position starting this spring. The cost increase will be covered by vacancies this year, she said. Going forward, the change would cost about $42,000 a year, Leaver said.
In addition to agreeing to repay the Water Fund loan to the Redevelopment Agency from the general fund, Inscore and Mayor Jason Greenough pointed to the increase in the Transitional Occupancy Tax as the reason for potentially increase funding for Crescent City-Del Norte County. Chamber of Commerce and Tourist Office.
Inscore, which sits on the board of the Bureau of Visitors, said its strategy was to continue to market the area during the pandemic. He noted that the city contributes $72,000 to the visitor chamber and bureau and offered to increase this by 1% of the additional $400,000 the city received in TOT.
“The numbers don’t lie,” Inscore said. “This will be the highest TOT in Crescent City history.”
While he acknowledged marketing played a role in Crescent City’s higher TOT, Greenough said COVID also played a role.
“People wanted to leave where they were and go out into the great outdoors and have fun,” he told Inscore. “But you’re right, they wouldn’t know where to go unless they saw it in an ad.”
The city council will host a budget workshop next week that will be attended by the S Measure’s oversight committee. Leaver said they will discuss the revenue the city has received from the tax measure and the community’s spending priorities for that money next year.