During its March 21 meeting, the Winters City Council heard a mid-year budget report from the City Manager Kathleen Salguero Trepa regarding the closing of the 2021–2022 fiscal year and the current 2022–2023 operating budgets, including a rare positive balance for the former.
Trepa presented to the council several tables and findings about the budgets for the 2021–22 fiscal year, which staff recently completed, as well as projections for the remaining fiscal year of 2022–23. The item on the table was approving the extra $168,000 General Fund revenue remaining in the accumulated fund balance as part of the operating reserve.
Referring to the 2021–22 positive budget, Trepa said “We’ve been able to close this last fiscal year in a positive balance primarily due to some staff vacancies that we had on the books…that was partly due to just difficulty recruiting staff” as well as the repurposing of grants for covering expenses.
Trepa noted some early difficulties with inflation as well as the departure of some employees that the city cashed out leading to the city not filling its HR technician opening and limiting its building tech employees to one. Inflation also led to some developers on city projects “not building at the rate they were previously” and “not having the same amount of discretionary spending.”
For 2022–23, the staff report said “This year has proven to be another year of significant transition for the organization” owing to staff changes and economic difficulties from lingering pandemic-related issues like inflation and personnel shortage.
One of the means the City is looking to maintain the budget this year will be revenue adjustments.
“The biggest adjustments” Trepa explained “are Transient Occupancy Tax and Sales Tax.”
“On the Transient Occupancy Tax, we were optimistically hoping that Fairfield Inn would open Oct. 1, they didn’t open until the end of December, so there’s a reduction of about three months there, and we’re seeing some reductions with Hotel Winters…overall, we’re anticipating the reduction in TOT (Transient Occupancy Tax) of about $136,000. Sales Tax, we are seeing a reduction in Sales Tax, and we’re forecasting that will be about $144,000 below,” Trepa said.
Trepa said as she conclude revenue adjustments, overall, “It’s a pretty large reduction of about $380,000 in revenue for those categories” but continued that “in positive news, our Property Tax is actually up $270,000” owing to pandemic-era property prices, which, along with building permits and the Municipal Services Tax, comes out to around $349,396, bringing the net difference in revenues to only $30,268, “which, all things considered, is actually pretty good.”
Trepa clarified that this report represents about “eight months of activities” from July 2022, but does include calculations and predictions with likely funding and expenditures by city staff. Mayor Bill Biasi also noted that the City does not anticipate filling any of the vacancies before the end of the fiscal year at the end of June, leaving that area of funding predictable for now.
Councilmember Jesse Loren commended the work of city staff, noting the achievement, saying “Bill and I are in our seventh year” on the council “we haven’t had years in the black. We’ve had a lot of years in the red, so I just wanted to acknowledge that staff has done an incredible job getting us here.” She also noted that vacancies don’t mean work isn’t getting done “It means that people are doing extra.”
Biasi agreed and noted that while the vacancies can be helpful for budgets “it’s definitely not sustainable” and that the City must “get people in here to fill those positions as soon as we can” to alleviate the workload of the current staff.
The council approved putting the extra revenue into the reserve balance unanimously.