ESCONDIDO — The Escondido City Council met Wednesday, Sept. 23, and received a year-end financial status report for the fiscal year 2019 to 2020, which showed that the city’s General Fund ended the fiscal year with a net operating loss of $3.8 million.
According to the staff report, the largest driver of revenue for the City of Escondido is sales tax from a diverse set of businesses. Health orders issued to address the impact of COVID-19, however, impacted businesses and resulted in a significant decrease in sales tax revenue.
“Receipts for the first quarter of 2020 were received and showed an actual drop of approximately 13% compared to the first quarter of 2019. A portion of the decrease was reduced economic activity, but a portion was also due to delayed sales tax payments allowed by various state programs,” according to the report.
Fortunately, the city received $1.2 million in budgeted one-time revenue and unanticipated funds totaling $5.5 million.
The report states that $1.5 million is from unclaimed deposits, $4.1 million is from the sale of Windsor Gardens Apartments located at 1600 W. Ninth Avenue to Windsor Gardens Housing Associates, $953,330 was given to the city through the federal CARES Act, and $405,375 was reimbursed to the city by the California Office of Emergency Services for the time and resources of the Fire Department staff deployed to State incidents.
As a result of this one-time revenue, the city was able to report a net ending positive amount of $3 million.
However, the city still has not solved its looming budget deficit problem. According to the report, the staff forecasts a budget deficit of $8 million in the fiscal year 2021 to 2022.
Back in July, the City Council declined to place a revenue measure on the November 2020 election ballot. This would raise the city’s sales tax by one cent to close a projected $176 million budget deficit over the next 18 years.
For now, the city has implemented cost-saving measures that include reducing staff, deferring infrastructure maintenance, investing in technology to reduce ongoing costs and outsourcing services, reducing the maintenance of city parks, and eliminating community outreach programs involving crime prevention and youth engagement.
The council voted to place the remaining one-time funds of $2.7 million in the Pension Trust Fund to be used to offset the impact of future cost-cutting and service reduction measures.
Finally, the City Council approved development plans for a Carvana Fulfillment Center/vending machine auto dealership, with an eight-tier glass and steel tower up to 75 feet tall, at 559 N. Hale Avenue.