Restricted Budget Pursued until Rescue Plan Allocations Come through

CITRUS HEIGHTS, CA (MPG) - At the April 22 meeting of the Citrus Heights City Council, the Consent Calendar was unanimously approved, including authorization for funding Citrus Heights Police Department (CHPD) vehicle replacement and two new police motorcycles.

The current 2020-21 General Fund Police Department budget includes $140,000 that can be used to purchase new equipment. The City has postponed other major purchases, so these funds are still available for transfer to the Capital Replacement Fund, which is used to purchase public safety vehicles when needed. The City used to allocate money to this fund each year, but it hasn’t been budgeted in the last three fiscal years due to recent financial constraints. Currently, the Capital Replacement Fund has just $124,000 for police vehicle replacement. While the CHPD does not currently need to replace vehicles, it is expected that some patrol vehicles will need to be replaced in the next year—a cost which can total $75,000 for each vehicle. Transferring the available funds now ensures that this money is budgeted for and available when needed.

The City also authorized funds to replace two motorcycles in the CHPD’s fleet, which were all purchased in 2013. Only one has been replaced since then, but as the motorcycles age, the cost of repairs and maintenance increases, so they need to be replaced before they become a safety risk to officers. Each motorcycle costs approximately $35,000 to purchase and equip, but the cost will not impact the City’s General Fund. The purchases will be covered by the CHPD’s Citizen’s Option for Public Safety (COPS) funding grant—money that is allocated to the City each year to be used for frontline law enforcement. The CHPD must spend these funds before the end of June, or the money must be returned to the County.

The Council also considered the final approval of the two-year budget for 2021-22 and 2022-23. The projected totals for all City funds are budgeted at $72.7 million in expenditures and $67.9 million in revenues for 2021-22, and $70.8 million in revenues and $67.9 in expenditures for 2022-23. A $77,305 General Fund shortfall in the first year will need to be covered by reserves, and an expected $3.7 million surplus the second year will be used to begin replenishing the reserves.

City Manager Chris Boyd explained again that the budget does not currently include any federal funding from the American Rescue Plan Act, from which the City is expected to receive almost $16 million over the next two years. “We don’t know today what we can use that money for and what the restrictions are. The federal government has told us that we will receive guidance from the Department of Treasury in May.” He cautioned that this one-time funding source could have various restrictions on its uses, so the City will make budget amendments as needed once details are released.

Citrus Heights resident David Warren submitted a public comment stating that the proposed budget had not been posted online with sufficient time for the public to prepare written comments. Warren also objected to the proposed budget because it does not include the City’s expected allocation of federal funding, which he said could fill some of the City’s unfunded needs. He also expressed concern that the “draconian department reductions” at the CHPD would be “an invitation to criminals.”

Robert Wichert said, “I am disappointed that the City Council has decided to cut public safety funding … because that’s really supposed to be the last place you cut. You cut public safety funding, response times go up, crime goes up, and public safety goes down.”

Albert Fox, a former councilmember, also commented: “I wish we didn’t have to make the cuts some of the places we do, but having heard the dialogue and heard the discussions, I think the budget is as fair as we can possibly make it given the results of where we are today.”

Councilmembers Tim Schaefer and Bret Daniels both advocated for postponing the budget vote until the federal funding guidelines are released so the budget can be updated to include those funds.

Mayor Miller said there is no guarantee that the guidance will be released on schedule, and the City needs a budget in place by July 1, in order to function. Due to the potential spending restrictions, the federal funds “may not help us,” he said. “That’s the quandary we’re in right now. And we’ve always put a budget together on time and balanced, and this is as close as we’re going to get. It’s tight this year.”

When creating a budget, Councilmember Jeannie Bruins said, “You base that projection on what you know, not on what you don’t know,” and it wouldn’t be prudent to wait for federal funding. Bruins explained that under the current proposal, while vacant positions won’t be filled, “we’re not cutting positions, we’re not laying people off.”

Vice Mayor Middleton said, “We cannot allow ourselves to offer false hope based on $16 million that we don’t know how it can be applied to our budget. I think it does more harm to our community to give them that sense of hope, when we don’t know, and then have to take it back.”

Mayor Miller also stated that if the federal guidelines come through in the next couple weeks, City staff will still need time to review the guidelines and adjust the budget: “We have to be very careful and strategic about this. … If we can use the money, great. If the money is so restricted that it doesn’t help us much, then this budget will get us through it and put us in a position to succeed in the future.”

The budget passed three to two, with Councilmembers Schaefer and Daniels dissenting.

A secondary resolution was presented along with the budget, asking the Council to authorize $35,238 for the City’s 2021-22 membership with the Greater Sacramento Economic Council. Councilmember Bruins said that while it’s a significant amount of money, the City has “really benefitted” from membership. Access to the organization’s information and statistics help to model the City’s economic future, which Bruins said is “well worth the investment.”  

Councilmember Daniels said he would support it, but only because he believes the federal funding will come through and fill that hole. The item passed four to one, with Councilmember Schaefer dissenting.