Yucaipa City Council adopted its set of short, mid, and long-term goals and objectives, many of which directly translated into service level options/priorities in the budget process on Monday, May 11.
In some cases, it might mean that additional funding is sought, partnerships are developed, programs are redirected, or work is re-prioritized in relation to council direction.
“As we meet the economic challenges we find ourselves confronted with, we have made progress with the short-term goals which are usually in two or three year increments and the list of goals and objectives is a comprehensive two-plus-year list,” said City Manager Ray Casey. “We have made some progress on the design of the Oak Glen Road Trails between Pendleton and El Dorado Ranch (Park). Also some progress along Wildwood Canyon Road and some of the improvements that we continue to do with Make-A-Difference Day support of trail extensions. We have not made a lot of progress in the private and public electric charging stations that we received grants for but we anticipate moving forward with those designs in the not too distant future.
“We have added sidewalks on Avenue E. The first phase between Second and Third Streets, the two round-about and sidewalk improvements in between the round-abouts,” said Casey.
Also completed on the list of carryover projects were phase one of three of the comprehensive Facility/Park Operations and Maintenance Study and a pilot program for residential improvements.
“We have started conversations with the college president and others relative to extending the aquatics facility agreement as prioritized by council in conjunction with discussions with them about an adjoint soccer complex, as you recall used to be a tennis complex … with not as many participants in tennis, over the years, with the number declining apparently.” said Casey.
Under the current economic conditions funding was not available for the Uptown Archway, Five Winds Ranch, Dunlap Park, and Wildwood Creek Specific Plan. Projects on hold are the Yucaipa Boulevard and Bryant Street intersection improvements, city wide camera phase VI and County Line interchange.
An extensive list of items that were completed or at least anticipated to be completed by June 30 of this year can be seen on the city of Yucaipa website with some project extensions to be completed by Sept. 30. Some of these projects the city staff is aggressively seeking grant funding to help with the costs.
The public safety portion of the budget will continue to become more imbalanced as times goes on. With annual revenues from property tax and current sales tax levels projected to increase in the neighborhood of 3% to 3.5% (now 2 to 3% in fiscal year 20/21 due to the COVID-19), the Sheriff Department contract increases 5.5% per year, and the paramedic assessment static, the Public Safety budget imbalance will grow from an estimated $1 million annually this year to an estimated $1.3 million next fiscal year, increasing from there.
Although the city continues to have among the lowest crime rates in the Inland Empire, and the fire department response times continue to remain well within industry standards, the city of Yucaipa is not immune from the impacts that other communities are experiencing, associated with continuing statewide realignment and decriminalization efforts and a growing number of emergency calls for service.
“Over the years, whenever the paramedic revenues exceeded the paramedic costs, we put aside funds in a separate savings account as it was always anticipated the revenues would exceed the expenses in the later years. This was adopted in 2004 and the estimate was 10 years but it ended up being more like 14 to 15 years. The last of that fund balance has been used to cover the Police and Fire budget imbalance this year,” said Casey.
Staff is recommending offsetting a small portion of the increase to the Sheriff Department contract by eliminating one Sheriff’s Service Specialist position as they are not allowed to perform many of the duties they previously did. Staff will also be recommending converting Fire Station No. 2 to a medic squad/station. This will reduce response times for medical calls (78% of the city’s calls) but increase response times for fire related calls city wide. This will help offset the fire and paramedic cost increases for the next year and beyond.
In addition, COVID-19 has also resulted in some cost saving due to facility closures and lack of programming. With the expectation that social distancing requirements in some form will continue, it is anticipated there will be fewer events, concerts, and festivals next fiscal year, resulting in some additional, but not significant savings in the overall budget.
“At the end of the fiscal year (June 30), the revenues are higher than we anticipated. The expenses are lower than we anticipated. We always budget conservatively for both revenues and expenses but when you take some of those unanticipated revenue increases at the first quarter, it reduces what you might have had in the form of higher revenues than expected at the end of the year and part of the higher revenues that you expected at the end of the year are the sales tax that we are not getting as much of this first quarter … the bottom line is that at the end of this fiscal year, you won’t see those net revenues that you have seen in the years past … This year as council member Duncan mentioned earlier, the revenues will probably be closer to breaking even with those costs incurred throughout the year and those revenue enhancements in the first quarter. Going into next fiscal year, if there are any net revenues left over, staff would not recommend that any of that be used for projects but that it be used to help offset the Public Safety imbalance that we see growing from year to year … as Police and Fire costs are likely to go up at about a 5% rate each year,” said Casey.
Even though in 2012 the state of California took away one of the most important tools local agencies have, redevelopment, to facilitate economic development in our community, the city has continued to utilize remaining Redevelopment Funds, Development Impact Funds, Grant Funds, and even one-time General Fund monies at times to provide the necessary infrastructure to support manufacturing and commercial developments that provide jobs, property taxes, and sales tax here in Yucaipa. These efforts have resulted in development activity throughout the community over the past few years with more on the horizon that will pay dividends in the years to come but will not provide immediate relief.
Consequently, much of the city staff’s focus over the past three to four months has been exploring financial mitigation measures to the Public Safety cost increases and now the Coronavirus recession. Staff has looked into any and all possibilities to increase revenue and cut costs. Reorganization of staff by reducing city staff, which city council approved earlier this year, cut costs by $120,000. Several positions were frozen in this fiscal year in addition to the recommended changes to the Police and Fire budgets.
“What we are trying to do in the general fund in the city hall side is to hold the line on everything … materials, supplies, specialty contracts and costs in the city hall general fund side. We are freezing several positions … We are trying to offset those public safety increases by holding the line,” said Casey.
Mayor Pro Tem Denise Allen said, “I think it is uncertain what this quarter is going to look like in terms of our income but that is why we have a reserve as well.”
Allen continued with, “We also have funds set aside for economic uncertainties. We have planned for this scenario so I think that we are in good shape. I don’t see any reason, if we can get our businesses back rolling, that this should be a continued state of affairs.”
Council member Dick Riddell said, “I don’t agree with council member Allen’s comments.”
Riddell also said, “We are not going to be in good shape in my opinion. In addition to what Ray has mentioned, I think we are going to get hit real hard on our Cal-Pers portion that we have to pay. Cal-Pers is funded primarily through the stock market and when the stock market doesn’t cover it the city has to make up the difference … it is going to be a bad year on the stock market so I think that with our funding for Cal-Pers which has been increasing every year, I think we are going to be hit with a big payment there and I think that is going to hurt us. I certainly don’t like the idea of the Paramedic Station in 2 but I don’t know what else we can do. What we really need is a Forest Fire Station in the location of Wildwood Canyon Park not reducing our Fire Stations … I think we are really going to have to bite the bullet and things are going to get tough. What Ray is talking about here might get us through one year but it is going to progressively get worse. It is a shame that the Measure E didn’t pass where the sales tax, if it ever recovers, would have covered our Safety Budget and it failed overwhelmingly so I don’t think that is something we can propose in the foreseeable future. I think going to a Paramedic Station at Station 2 is just something we are going to have to do, I don’t like that but I see no alternative. We are going to have to keep our options open to increase revenues because things are just going to get worse and they are not going to get better, just worse. Any of these reserve funds we have are going to be soon gone as we are already touching them. Our expenses are increasing with the Performing Arts Center. Our city expenses are going to be increasing by a couple million bucks a year so I don’t really feel that good about the future and our financial situation but I think going to a paramedic station is a start. It is not something that I like but what else can we do? I am not too optimistic about the future financially.”
“What does that do to our response times?” asked Councilmember Bobby Duncan.
Duncan continued, “If we are responding from Station 3 or Station 1 to the Dunlap area, whereas Station 2 would have done that work. What does that do to our overall response time to fire?”
Riddell responded with “What is really going to hurt even more is that we have annual fires in the Crafton Hills area and with Station 2 not being able to get there right away (covering that area in the past), this is going to delay getting to those fire situations. It’s not a good situation but we are in a position where we have no choice, I think.”
“I had a lot of conversations with a lot of different people over that whole Measure E thing and I’m still getting crapped on pretty hard by a lot of people. In fact, they said politically, I committed suicide and all I did was vote to put it on the ballot. I am concerned as it is about a $450,000 savings by converting Station 2 to a Paramedic or Medical Response,” said Duncan.
Casey responded “Annualized as you won’t see that all this year because it will take six or seven months to get it fully implemented and then it is estimated to be about that but there is still going to be an increase. Just to clarify, it is a reduction in costs and not really considered a savings.”
Councilmember Greg Bogh commented, “When it comes to the economy, what I am thinking is, what is the governor going to do?”
Bogh continued with, “We are in a critical time right now and if he (the governor) doesn’t start making changes now, then I can see where council member Riddell’s scenario takes place. If he makes changes now, there is enough optimism out there that we can overcome. We are going to have set-backs but I think it really relies on what our governor does.”
Mayor David Avila had one question, “With respect to the shared Resource Officer that we have with the school district, do they still have the funding available to pick up their share of the tab?”
Casey responded, “They say they do, yes.”
“This was a status report, so no action necessary,” said Avila.
Supporting documents are available for public view on the city of Yucaipa website at yucaipa.org.