Concord City Council dips further into reserves to balance budget

Given the “immediate impact” of the COVID-19 shutdown, the Concord City Council approved an adjusted city budget on June 23 that includes seven layoffs while also relying more heavily on reserves.

Three community service officers and assistant city manager Kathleen Trepa are among those being laid off. The city is eliminating 36 full-time equivalents (FTEs) through layoffs, hiring freezes and voluntary separations. In addition, all non-union city employees are delaying raises, suspending retirement contributions and/or taking furloughs.

At the June 23 meeting, the council also voted to accept an offer from the police unions that will save $1.2 million over three years. That is in addition to the 24 fewer police positions in the Fiscal Year 2020-’21 budget.

The city is in talks with the Teamsters and Local 29 of the Office and Professional Employees International Union about other possible cost reductions.

In reviewing the budget changes, the council opted not to cut the $43,000 allocated to the Family Justice Center. Councilwoman Carlyn Obringer called the services addressing things like elder abuse, domestic violence and childhood trauma “vital” to the community.

“This is too important – 40 percent of our violent crime is domestic violence,” said Councilman Edi Birsan.

Obringer suggested the city help the center find a “supportive off-ramp” to private funding for future years, rather than cutting them off “cold turkey.”

Several council members also expressed concern over the loss of two code enforcement officers through vacant positions, so they agreed to include the issue in a July 15 Community Forum on policing.

Long-term impact

Like in communities worldwide, the shelter-in-place order severely reduced the city’s tax income – which comprises three-quarters of the General Fund budget.

“The city was already facing significant financial challenges, and these challenges have increased substantially,” noted budget officer Donna Lee.

The 2020-’21 budget now allocates $4.9 million more in reserves than anticipated. That leaves the city with a 21 percent reserve, which is well above its threshold of 17 percent.

Finance director Karen Reid said staff might need to recommend additional budget stabilization measures should the drops in revenue be more significant than current estimates.

“It’s very likely that a number of businesses won’t reopen,” she said at the June 9 meeting. “People have changed their spending habits – everybody has learned to make bread at home. So now they’ll probably be doing less purchasing of taxable items and being more focused on experiences, which aren’t taxed. And there may be less travel.”

Lee listed some key financial issues facing the city going forward:

• Deferred maintenance and infrastructure needs.
• Increases in state pension costs.
• Continued reliance on Measure Q to maintain essential services. The tax expires in 2025.

“There are projected budget shortfalls into the future of the long-range forecast,” she said. “Fiscal stability measures will need to be implemented within the next two years in order for the city to maintain essential services.”