The city of Napa is reinvesting funds in improvements to local parks, sidewalks, equipment replacements and other areas previously reduced at the start of the pandemic after receiving more revenue than expected in the past fiscal year.
Napa City Council voted unanimously this week to allocate a projected surplus of revenue of $ 5.44 million from fiscal year 2020-2021 – which ended in early July – to several areas that have suffered cuts due to a predicted financial downturn due to the pandemic.
As a result of the vote, approximately $ 1.5 million will be donated to funded park improvement projects; $ 913,000 is donated to the city’s sidewalk program; and $ 1.16 million will go to the City’s Capital Improvement Program facilities reserve.
In addition, $ 406,000 will be donated to the city’s fire apparatus replacement reserve; $ 150,000 will go to the equipment replacement reserve; and $ 186,000 will be donated to the city’s parking security fund.
“The city is relieved to be able to reallocate these dollars to Napa community sidewalks, public facilities and our firefighting replacement funds – all of which suffered drastic cuts in the original budget,” wrote the City Manager Steve Potter in an open letter. . “In addition, we have reimbursed necessary renovations to the equipment of playgrounds, replacements of park infrastructure and repairs to parking lots so that residents can safely and comfortably enjoy the outdoors in our parks. “
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The council also allocated $ 150,000 for hiring and recruiting incentives, which has remained a challenge for the city – and employers across the country – during an economic recovery this year. And the concurrence motion called for $ 1 million to be placed in the city’s Section 115 trust, which was created to help mitigate increases in future pension costs and did not receive a contribution. during the 2020-2021 fiscal year.
The city’s revenue has been hit significantly over the past fiscal year, Potter said, and the surplus is the result of the city budgeting around a projected revenue cut of $ 20 million.
“I think it’s important to remember and keep in mind that we haven’t seen an increase in general fund operating income this year,” Potter said. “Our current financial situation is the result of the actions we have taken. “
A General Fund budget approved in June 2019 projected that the city would receive $ 104.75 million in revenue and spend $ 103.3 million in fiscal year 2020-2021.
The city ultimately generated around $ 88.3 million in revenue – and added around $ 6 million in one-time revenue by funding various city projects – and spent around $ 88.6 million in the last fiscal year, City Budget Officer Jessie Gooch said. The city only managed to spend $ 88.6 million on cuts and freeze vacancies.
This amount of revenue does not include the $ 7.4 million the city received from the US federal bailout in May, as guidelines on how the funds are to be used are still evolving, the chief financial officer said. Elizabeth Cabell. (The city will receive a second allocation of $ 7.4 million in American Rescue Act funds in the current fiscal year, according to the registry’s earlier reports.)
“When that money was first made available and sent, it was sent like ‘here is money, spend it, spend it on whatever you need to spend it’,” said Potter at the meeting. “We have since discovered that there are restrictions and limitations on this money. The last thing we want to do is have to pay back $ 14 million because we made unauthorized expenses, so we try to be very careful.
Although the city’s property tax revenue continued to grow steadily, revenue generated from the business license tax, sales tax, and hotel room tax, as well as revenue generated from municipal services, all declined during the pandemic, Gooch said.
The biggest drop in fiscal year 2020-21 was in the hotel room tax – known as the transitional occupancy tax, or TOT – which generated just under $ 12 million in revenue compared to $ 23 million for the 2018-19 fiscal year, Gooch added. But revenue from that tax was up when the fiscal year ended in late June, she said.
Napa council members said they were happy to see the city’s budgeting process paying off.
“We’re not out of the woods yet, but the work here and everyone’s sacrifice really shows that we’ve put ourselves in a better position than we thought we were in,” board member Bernie Narvaez said.
Board member Liz Alessio said she was okay with the hiring incentive allowance at the moment, but was concerned that it was not enough for the city to be competitive in the hiring for certain positions, such as police officers – who typically receive around $ 15,000 in hiring bonuses. , she said.
Council member Mary Luros said the hiring allowance is upfront funding and City Council will be able to further fund the hiring incentives, if needed, later.
Several board members also said they were anxious to find out what the American Rescue Act funds could be used for.
“We’ve been pretty conservative in the way we’ve approached our finances during COVID, and I’m so grateful that we are able to bring back some of these projects that have been really, really hard to cut,” Luros said. “I think we’re still a bit out of breath and the future is still unknown – we don’t know how long this will continue – but I appreciate the staff’s balanced approach to allocating those funds and bringing back some. of those who are really difficult. cuts.
You can reach Edward Booth at (707) 256-2213.