City fiscal condition sound

May 14, 2020

The City of Madera delivered good financial news at the regular meeting of the City Council on May 6.

 

City Finance Director Roger Sanchez said the good news was that the city’s fiscal condition was sound, but that was largely due to multiple positions remaining unfilled within the city and the fact that the COVID-19 lockdown had hit California only in last weeks of the third quarter of the city’s fiscal year. “The first three quarters (of sales tax revenue) were healthy — better than expected... the challenge will be to figure out future implications ...” of the COVID-19 impact, which has significantly reduced sales tax revenues all across the state and Central Valley, Sanchez said.

 

Approximately $2.1 million dollars in salary savings was unspent and carried forward due to those unfilled positions, he said, and no layoffs were anticipated in the near term, other than the 64 part-time parks and recreational program personnel which were already furloughed when those social and parks programs were ordered closed due to social gathering restrictions. The city of Madera still also has very healthy financial reserves or “rainy day funds” of over $13 million on hand, only for use in emergencies, he said.

 

The city implemented standard social distancing guidelines in mid-March, restricting public access to city buildings, and made other public services available by appointment only.  

 

City Manager Arnoldo Rodriguez cautioned the council that the second quarter sales tax revenues were a lot more concerning and down an average of 36 percent Valley wide, beginning in April. Projections indicated that revenue from major individual categories of auto sales were down 55 percent, building down 40 percent, business receipts down 30 percent, fuels taxes down 50 percent, and restaurant and hotels were hit the hardest with at least a 60 percent decline in sales tax revenue. 

 

Rodriguez said the city finance staff was watching sales trends in 15 comparable area sales tax models in the Valley carefully.

 

“Assuming the shelter in place order is lifted at the end of May. These numbers are so fluid ... and sales tax numbers are (determined) three months behind. The entire fiscal year of 2021 is projected to be down about 2 percent, but unfortunately we won’t know more until September,” Rodriguez said. 

 

Various large state and federal grants for small cities were being announced and applied for in the unusual situation of the COVID-19 pandemic, he said, but receipt of those funds were less certain.

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