The Elk Grove City Council on June 10 unanimously approved the city’s budget for the 2020-21 fiscal year, which begins on July 1.
The city’s total budget for the upcoming fiscal year is $304 million, which is a $13 million increase from the city’s current budget.
Elk Grove was significantly impacted by the financial impacts resulting from the stay-at-home orders issued in March by state and Sacramento County public health officials to slow the spread of the novel coronavirus (COVID-19). Businesses not considered to be “essential” financially suffered due to related closures.
The city projects a decline in sales taxes of about $4.7 million in the next fiscal year. That major decline in sales tax revenue is the largest financial impact affecting Elk Grove. Much of the city’s sales tax revenues come from sales at the Elk Grove Auto Mall, the city staff reported. In terms of percentage, the city expects the greatest decline to occur in hotel taxes.
The city’s proposed General Fund budget totals $74.4 million, which equates to about a $7 million reduction to what the city originally projected.
Shane Narayan, the city’s budget manager, described the city’s approach to the General Fund.
“For (fiscal year 2020-21), the General Fund provides fiscal conservancy and responsibility by curtailing and reducing spending as a response (to) losses as a result of the COVID-19 pandemic,” he said.
The General Fund will continue to provide funding for City Council priority projects, and does not reduce service levels for Elk Grove residents.
Among the city’s spending reductions are freezing 10 unfunded, vacant staff positions and not creating new staff positions ($1.6 million), transferring the recycling and waste franchise fee revenue ($1.2 million), and temporarily eliminating accelerated payments for California Public Retirees’ Retirement System’s unfunded, accrued liability ($900,000).
After hearing presentations on the budget plan, the council listened to public comments.
Among those who addressed the council was Elon Gunning, who criticized the amount of funding allocated for the city’s police. The city’s new budget plan will dedicate 67% of general funds for the Elk Grove police.
“The Elk Grove Police Department is set to take up 67% of the General Fund,” Gunning said. “That is entirely too much money.”
She requested a reduction in police funding by at least 30%.
Another speaker, Lynn Wheat, suggested that the council direct staff to prepare quarterly reviews of the budget due to the fiscal impacts that the COVID-19 situation has had on the city’s revenues. The council approved the proposal to review the budget every three months.
Council Member Pat Hume spoke in support of that change.
“Budgets are always blueprints, right?” he said. “They’re living documents, and I think that’s probably going to be even more true with this year’s budget, as we compare forecasts to actuals.”
Hume also addressed the concept of “defunding” the police department, which was promoted by demonstrators who protested police brutality and rallied outside Elk Grove City Hall that morning.
“I am very proud of our department and how they operate, and the men and women serving, and I think that we are already doing a lot of the things that have been called for,” he said.
“People, if they took a deeper dive into what comes under the umbrella of our PD funding would realize that there’s the homeless navigators and the problem-oriented policing, the animal shelter and animal services, and there’s a lot of things that are not just guns and badges so to speak.”
Considering local surveys, which note Elk Grove residents’ top concern as public safety, Vice Mayor Steve Detrick noted that he is not willing to take any shortcuts with the police department.
“If you don’t feel safe in your homes, safe in the parks, safe on the streets, safe while you’re shopping, and safe at work - there’s no value of being here in Elk Grove,” he said.
Mayor Steve Ly noted that the city is currently in a good position with its police department, but that the city is interested in monitoring the status of the department.
“We’re always looking for opportunities to improve,” he said. “I think that if we move forward with that concept, we are going to be that city that will put a magnifying glass over our police department. As many of you have seen before, the chief has done an excellent job.”