Fresno expects $39M revenue dip through next fiscal year. Will there be layoffs?
The Fresno City Council on Thursday got what one member called a “doom and gloom” presentation of just how bad the city’s budget is likely to be hit by the coronavirus.
Assistant City Manager Jane Sumpter said early estimates have the city’s budget down about $39 million for the rest of this fiscal year and through the next year, compared to previous predictions.
“We are still in the very early stages of this episode,” she said. “We are still tracking a lot of information concerning the impacts of what this thing will be.”
Sumpter said the estimates may be too rosy – and the impact could be significantly worse.
The numbers are quickly changing, she said. Sales tax is expected to take the biggest hit from the shuttering of nonessential businesses and the city’s shelter-in-place order.
The state has had little time for a full assessment of the economic impacts because the pandemic landed in California so close to the final quarter of the fiscal year, Sumpter said.
The reporting of sales tax for the last quarter was delayed by an order from Gov. Gavin Newsom.
Fresno has received about $146 million in federal dollars related to federal COVID-19 relief, according to city staffers. The city also has about $35 million in reserves.
The city can also apply for more relief through the Federal Emergency Management Agency.
Aid and reserves
Councilmember Miguel Arias, who used the term “doom and gloom” several times to describe the city’s presentation, said the aid and reserves may give the city a buffer from the worst effects.
“I don’t want to cast any unnecessary fear on the public or the employees that we’re going to engage in layoffs and furloughs immediately,” he said.
City administrators were less hopeful Thursday.
The administration has begun to slow down hiring and will only fill necessary positions for the foreseen future, according to City Manager Wilma Quan.
A large amount of the federal relief comes to the city with restrictions on how it can be spent, she said. Quan warned the city leaders not to plan on having the general fund buoyed by federal relief.
Layoffs and furloughs
Speaking during the Thursday council meeting over Zoom, Quan said she and her staff are looking at options like furloughs and layoffs. She said she did not have a specific plan.
“We are trying to be mindful because we are learning new information daily on these funding sources, what they’re eligible for, and then the impacts to our budget,” she said. “I don’t want to do something early on that is detrimental to our employees.
The city of Los Angeles announced 26 days of furloughs – a roughly 10% pay cut – for thousands of its employees on Sunday. San Diego furloughed hundreds of nonessential employees.
Councilmember Luis Chavez, who worked at the city during the Great Recession, said it’s important to be up-front with employees related to job or hour cuts.
“I think that we’re at a point where we have to have a very honest conversation with folks,” he said.
This story was originally published April 23, 2020 at 5:11 PM.
