Despite setting aside funds from reserves to cover a projected budget deficit for the most recent budget year, the La Palma city council learned this week that will not be necessary.
“Things were a bit different back in March,” said the city’s financial consultant Michael Matsumoto, when projections had to be made after the initial onset of the pandemic.
Officials then estimated the city could run a fiscal 2019-2020 budget deficit of approximately $500,000 because of stay at home orders and other COVID implications.
Since then, said Matsumoto, “revenues exceeded expenditures and the deficit did not happen.”
First of all, he said tax collections ran closer than expected to normal, the city received two grants and unexpected long-term investment income of approximately $200,000.
And, because of the pandemic, many expenses that had been budgeted were not expended so it all combined to produce a “million-dollar swing” to balance the budget.
Matsumoto told the council that it was no longer necessary to take funds from its reserves to balance last year’s budget.
Going forward, Matsumoto said “it is still not absolutely clear where COVID is going to go and affect our finances.”
While the current budget does show a slight deficit, the finance consultant said, “I’m not sure you will end up with that deficit unless things get a lot worse.”
Matsumoto recommended the city wait until early 2021 to make any changes.
The Council skirmished a bit over leaving funds budgeted for the “Festival of Nations” event that was scheduled for earlier this year and which has now been moved to 2021.
Acknowledging they could always move the funds if the pandemic prevents the city from hosting the event, the council voted 4-1 to approve a resolution to amend the 2021 budget.
Also, the council voted to allow city staff to continue negotiating with Elite Taekwondo, a tenant on city property to whom the city has granted conditions and waived rent because of the stay-at-home orders and other COVID complications.
Mayor Peter Kim asked if the tenant had received one of the small business grants from the city and was told yes by staff. Several members of the council said they wanted to do everything possible to help the small business.
“I want to be a good steward,” said council member Marshall Goodman, “but I want us to be good stewards as well.”
The council okay’d continued negotiations and will revisit the item in December.
In other action this week, the La Palma Council:
• Voted unanimously to approve a raise in the salary of the city manager from $190,000 to $199,500 per year, plus benefits.
• Approved an Award of Contract in the amount of $222,970.60 to PlayCore Wisconsin Inc., dba GameTime, for Replacement of Playground Equipment and Surfacing at El Rancho Verde Park.
• Approved an Award of Contract in the amount of $278,700.00 to the low bidder, LJB Construction, Incorporated for the City Hall Restroom Refurbishment Project.
• Approved an Award of Contract in the amount of $349,900.00 to the low bidder, InterPacific, Incorporated for the City Hall Electrical Upgrades Project.
• Authorized additional project funding in the amount of $97,635 from the Capital Outlay Reserve.
• Approved “long overdue” parking lot improvements for the La Palma Shopping Center.
• Welcomed new council members Debbie Baker and Mark Waldman. They will be sworn in at the Council’s next week. Mayor Peter Kim and council member Gerard Goedhart have termed out.
