While the state government and many cities around California are struggling to adjust their budgets due to economic shortfall brought on by the novel coronavirus pandemic, San Ramon city officials say they will be able to make up for revenue shortfalls using its strong general fund reserves.
San Ramon's newly revised 2019-20 fiscal year budget projected a $1.9 million shortfall in reserves due to effects of the virus and subsequent shelter-in-place order, but the city will be able to prevent major cuts to their 2020-21 budget by using money from its general reserve fund to make up the difference, according to city officials during a budget workshop held Tuesday.
"It's my impression that all of the work that we've done up until today has been to prepare ourselves for what's happening right now," San Ramon Mayor Bill Clarkson said during Tuesday's workshop.
Revenue drops have primarily come from losses in sales taxes, transient occupancy taxes (TOT), franchise fees and charges for services such as recreation activities, according to San Ramon's administrative services director Eva Phelps.
Phelps added that prior to the 2019-20 midterm budget, the city had been projected to see a surplus of approximately $800,000.
During Tuesday's meeting, city officials provided council members with a number of reductions that could be made to their departments in order to help make up for a budget shortfall -- including major cuts to the city's Parks and Community Services Department -- however the council found that general fund reserves are strong enough to bear the burden.
San Ramon city policy sets maintains reserves of 40% worth of the prior year's general fund operating expenditures, with reserves exceeding $18 million going into the 2020-21 fiscal year.
These funds saved the city from making major cuts that potentially included parks maintenance and janitorial services, however as Vice Mayor Sabina Zafar pointed out during Tuesday's workshop, some expenses -- such canceled events that included large public gatherings -- will organically be saved without the city's intervention.
"We have pretty conservative revenue estimates but that's the difficult part right now. We don't really understand or know exactly how we are going to get hit from a revenue standpoint," added City Manager Joe Gorton. "And then as you know there's a $54-plus billion problem at the state level and you know when the state has problems somehow that tends to trickle down to us. So there's still a lot of unknowns, but it is a budget that is presented without service cuts."
The council is set to officially approve the city's budget and allocate the necessary general fund reserves during a regular meeting scheduled to be held in the beginning of June.
Tuesday's workshop -- like all City Council meetings -- is available for viewing on San Ramon's officials YouTube page.