Although the pandemic has struck a financial blow to every local government, the city of La Palma’s finances have been bolstered by an ordinance passed back in 2017 that mandates savings for emergencies.
Mayor Peter Kim said this week that while La Palma’s treasury has been seriously affected by the pandemic, an ordinance requiring an amount equivalent to 50 percent of its previous year’s budget to always be held in reserve, should ease the city through the crisis.
In addition, Kim said the ordinance, passed in 2017, also requires the city council to transfer at least 25 percent of any budget surplus into that emergency fund each year.
The result, said Kim, is that the city has enough in reserve (all funds) to cover its current yearly budget, though only a small portion will likley be required to cover the COVID deficit.
Kim said some of those funds will be required for the current shortfall, but overall, the city’s is still in relatively good financial shape (see related story).
“It seems like things are getting somewhat better, and I know folks overall are cautiously optimistic about the future,” he said.
Nevertheless, Kim said the state of emergency would continue and the city would adhere to all state and federal guidelines as the city slowly reopens to the public.
Kim noted that it will take a while to know the exact extent of the job loss in the city and the overall financial impact of the pandemic.
He said the various reporting agencies will not be able to report the final numbers until they can be properly calculated, he said.
“There are some folks ready to get out there and start working again,” said Kim.
“Unfortunately, these are unprecedented times, and while folks are just ready to do things they need to do, we’ll open slowly, according to state guidelines, until there is a permanent solution.”
