Antioch Says Budget in Good Shape, But Could Run Out of Money by 2025

In a press release Monday, the City of Antioch said while other cities have began conversations about financial reductions, Antioch says it is preparing for growth.

The press release did not include the fact they are using the Budget Stabilization Fund to balance the budget and over the next three years are using reserves, but believe they are in a secure position as the Bay Area enters into the COVID-19 recession. They are also utilizing around $14 million in Measure W monies to help with the budget.

Last weeks budget report comes after City Manager Ron Bernal highlighted a California League of Cities Survey which shows there is going to be an estimated $7 billion shortfall for cities around the state. The survey also shows 90% of cities are going to be cutting staff or furloughing employees while 72% said they were doing both.

This comes as the Cities of Brentwood, Concord, and Pittsburg have all announced budget cuts will be coming, Antioch says it will make it through the COVID-19 recession.

During the April 28 city council meeting, the council reviewed the Fiscal Year 2019-21 Mid-Year Budget Report where Dawn Merchant, Finance Director, reported that the city was in a good place at this time but they have not seen the worst of what is to come.

Merchant reported that in the next two fiscal years they have very healthy reserves with 30% reserves, but warned the council that they are using the Budget Stabilization Fund to balance the budget in Fiscal Year 2021 because they do not have enough revenues to cover the budget spending. She also shared the Fiscal Year 2020 deficit spending was due to the Eames settlement of encumbrance/project budgets carried forward from 2019.

According to the Staff Report, the city had to utilize the budget stabilization fund to transfer $3.226 million for FY 20 and $2.266 for FY21 and they have not yet seen the worst of things to come.

“I feel like we are in a good place right now and not experiencing much decline in our sales tax, however, its important to note this is probably only scratching the surface. We do have a different revenue basis than a lot of other cities, but this is really an unknown territory for us and also cities as things are changing daily,” stated Merchant. “We really do not know what is going to happen and how long the impacts are going to last.”

She urged the council to be “fiscally prudent” as they move forward on any expenditures they make through this pandemic.

Back at the April 14 meeting, the City Council received two budgets in which one of the budget projections showed the city would “completely run out of money in Fiscal Year 2025”.  There could also be a $4 million short fall in sales tax next year.

During both meetings, Councilwoman Lori Ogorchock requested the city ad to its parking abatement team because they are pulling cars off the street and cleaning up the city. The rest of the council put off the decision until the August meeting.

Meanwhile, Mayor Pro Tem Joy Motts pushed they include the $75k for a part-time unhoused resident coordinator within the budget—a decision that was put off by the council until they speak to their sales tax consultant.

Here is a copy of the Press Release:

IN COVID-19 ENVIRONMENT, CITY OF ANTIOCH SEES STABLE AND SECURE FINANCIAL POSITION

Through fiscal discipline, city preparing for growth and opportunity

ANTIOCH, Calif. – As cities throughout the Bay Area begin to have conversations regarding financial reductions as a result of COVID-19, the City of Antioch is preparing for growth.

Key to the City’s formula for financial stability has been the commitment to providing quality services to Antioch’s residents through efficiencies rather than the conventional approach of hiring a large workforce to meet city needs. In Antioch, a full-service city of over 115,000 residents, city officials have been able to keep the workforce at fewer than 400 employees.

“After the trauma of the 2007-08 recession, city leadership recognized that we had to operate differently to strengthen the City’s financial health for the long-term,” said Ron Bernal, City Manager, City of Antioch. “By implementing financial procedures and discipline, the City will continue to make strategic expenditures that will enhance the quality of life for our community while also protecting the City’s financial position.”

Through a combination of timely passed sales tax measures, steadily increasing sales and property tax, approval of cannabis-related businesses, and a disciplined approach to adding staff and spending, Antioch looks to be in a secure position as the Bay Area enters into the COVID-19 recession.

By recognizing an opportunity, and working with a balanced budget, city officials are preparing for growth that will propel the City of Antioch as a major player in the Bay Area economy.

From the planned construction of a $70 million Brackish Water Desalination Plant – made possible through a $10 million Proposition 1 grant and a $27 million settlement from the California Department of Water Resources – to the redevelopment of property sites near the massive $1.4 billion Highway 4 and BART improvements, the City of Antioch is well-positioned to become a model for fiscal discipline and growth.

“I’m cautiously optimistic and excited about the future,” added Bernal. “Opportunity really does live here in Antioch.”

Antioch will revisit their budget in August.

For more information on the budget, here is a link to the staff report.