Staff says revenues are “over budget” but still recommends massive cuts to services in face of COnVID panic attack

The Finance Committee met Wednesday (4/22/20) under cover of COnVID, with no public present, and a questionable comment system.  Luckily, the reports are available so we can see what they’re up to, even if we were not able to comment at the time. These issues still have to come to a council meeting, so why not  talk about them now and send our comments directly to the councilors before their next clandestine meeting?

Finance Director Scott Dowell gave his usual presentation, and while he said repeatedly that city revenues have been “over budget,” he still warned that the COnVID panic was going to set us back. So, city management has already been making cuts.  Dowell presented the order of the cut-backs to the Finance Committee last Wednesday (4/22/20).   They’ve already begun Phase 1 – in fact, as you may know, for example, there hasn’t been a capital project in Chico for over a year now, since they gutted the streets fund to pay their pensions. 

FYI – the improvements being made along Hwy 32 are being done by CalTRANS.

Phase 1
Delay new capital or one-time expenditures for 6 months until 1/1/2021.       CUT SERVICES                     DONE
Delay General Fund transfers to emergency reserves and replacement funds.                                              DONE
Delay or eliminate new recruitments.                                                                                                              DONE
Defer CalPERS UAL payment in July and pay monthly. Will cost $328,661 in interest.
Delay or Remove General Fund transfers to Private Development Funds for 1 year.  CUT SERVICES          DONE
Close City Hall Operations One Day or More per Week (Utility Savings).                                                      DONE
Furloughs (continued health benefits).             CUT SERVICES WHILE STILL PAYING                                 DONE
Hiring Freeze.                                                                                                                                                  
Utilize Section 115 Pension Stabilization Trust.
Grant Opportunities.                                                                                                                                       DONE

Note that almost everything they’ve done on this list results in a direct cut in services. But, they are still making payments on their Unfunded Accrued Pension Liability, threatening a loss of $328,661 per year in interest penalties if they don’t.   They just  raised development fees, so we’ll see what happens with the Development Fund. And, while they say they’re delaying recruitment, they just hired two new positions, including a Public Information Officer – why would we need a PIO at a time like this? 

And there’s the Pension Stabilization Trust – they’ve been siphoning millions out of other funds, into that trust, to be saved for paying down the pensions. Will they use it? Of course, that fund is restricted to paying their pensions. 

I think this illustrates what I’ve always said – the first thing they cut is services, which is the whole point of having a city.  Look at the street in front of your house – unless you live in a new subdivision, you haven’t seen road crews in your neighborhood for years. Unless they were shoveling slobbers into pot holes. (Slobbers are the left over asphalt or cement from a job, they have to get rid of it, or it will dry rock hard in their truck, so they go through an old neighborhood on the way back to the yard and empty their truck into potholes. These patches last a week at best, and will get all over your car if you drive through when they are still wet).

And get ready, cause they will continue to cut services, cut services, cut services, until we agree to pay their sales tax increase. 

Phase 2
Initiate Financial Emergency Budget Policy.  CUT SERVICES
Suspend Minimum Staffing limits.    CUT SERVICES            
Negotiate temporary salary reductions. Why isn’t this number 1? And why not permanent? Why not negotiate higher shares? 
Institute Department-wide reductions (utilize plan revised plan from Sept 2018). CUT SERVICES
Layoffs.   CUT SERVICES

Phase 3
Discontinue Waste Hauler Franchise fees to Roads. CUT SERVICES – DONE  (they’ve already deferred these fees from the roads for 2 years)
Freeze Existing Capital Projects.   CUT SERVICES
Discontinue funding for Arts Commission projects.  REALLY A NO-BRAINER, WHY WASN’T THIS IN PHASE 1? 

I’m sure you have your own questions – put them in an email, and send them to council.

ann.schwab@chicoca.gov

alex.brown@chicoca.gov

sean.morgan@chicoca.gov

kasey.reynolds@chicoca.gov

scott.huber@chicoca.gov

karl.ory@chicoca.gov

randall.stone@chico.gov