UPDATE (6:37 p.m.)

After trouble-shooting myriad technical difficulties with the City’s Zoom feed and audio, the Eureka City Council directed staff to proceed with work on the draft budget for the 2020-2021 fiscal year. Another public hearing will be held July 7. Mayor Susan Seaman encouraged members of the public to give feedback and public comment.

Tonight’s presentation drew little comment from staff or the public. Due to COVID-19, public comment was delivered via phone. A Ward 3 resident called to say she thought it was “tragic that half of the General Fund funds the [Eureka Police Department]” and encouraged the city to fund more programs that “uphold the values of wellness and life.”

Humboldt Bay Fire Chief Sean Robertson said proposed budget reductions could result in the closure of two fire stations; the department will be leaning on its reserves for this year but following years look grim. Several councilmembers echoed this concern that the worst is yet to come.

Lane Millar, city finance director, replied that the proposed cuts were intended to stabilize the city’s budget against a gaunt year for sales and transient occupancy tax revenue.

“The purpose of these cuts is to get us to a place that’s sustainable,” said Millar. “Furloughs would be the next steps but we’re hoping we don’t have to go there.”

Leslie Castellano, Ward 1 councilmember, asked if the budget could be amended or revisited later in the year should the local economy rebound; Millar said it could. Castellano also expressed interest in starting a grassroots funding campaign for neighborhood-based community groups that would advance safety and equity.

PREVIOUSLY:

Eureka City Council meets tonight to discuss and provide direction on a draft budget for the 2020-2021 fiscal year that includes deep cuts due to the impact of COVID-19. Among the departments most affected are Community Services and the Eureka Police Department.

According to Lane Millar, the city’s finance director, Eureka is anticipating an 11-percent decrease to Sales Tax and a 24-percent decrease to Transient Occupancy Tax, reflecting the severe impact the pandemic has had on Eureka’s tourism and retail industries. These predicted losses prompted staff preparing the draft budget to slice 15 percent from the city’s General Fund. Last year the approved budget predicted the General Fund to top out at $29 million but projections show it coming up roughly $3 million short due to lost revenue in the latter half of the fiscal year. This, combined with revenue losses across the board, including special revenue funds and charges for services, contribute to an austere outlook on the city’s future. The 2018-2019 final revenue summary was $76 million. For 2020-2021 the draft budget shows a predicted income of $66.6 million. (A copy of the proposed budget can be found here.)

So, where will the city tighten its belt to make up for a $10 million deficit? Some of the biggest cuts are proposed for the Eureka Police Department, with the loss of four officer positions, a senior dispatcher and a property technician. EPD Chief Steve Watson says no staff are being laid off, but four vacated positions have been frozen and two officers — senior detective Ron Harpham and officer John Drake Goodale — have been approved for early retirement. The department had previously unallocated four other vacant officer positions in 2018 in order to offer a 5 percent pay increase to sworn officers in an effort to address an ongoing recruiting and retention crisis.

“These cuts hurt and are unfortunate but appear necessary given the current deep projected deficit in the city’s fiscal year 2020/21 budget,” said Watson in an email. “We understand EPD has to do its part to help the whole city through this very difficult time and we worked together as a team to get it done.”

Watson added that further cuts could create “real trouble in terms of providing the level of service our citizens need and have come to expect,” threatening the existence of programs such as the Community Safety Engagement Team, a multi-jurisdictional homeless outreach initiative, and pushing the department toward “emergency level responses only.”

The total projected budget for the department for the 2019-2020 fiscal year was nearly $15 million; its projected budget for 2020-2021 is $13 million. Watson said the new budget leaves “little margin for error” but he appreciates the city’s leadership team prioritizing maintenance of its current level of services, including CSET.

“We are resilient and committed and we’ll find a way forward together,” said Watson. “I have hope that the day will soon come where we’ll be able to disembark the crazy train that has been 2020 so far and capitalize on the promise of better times.”
Interim City Manager Miles Slattery echoed Watson’s language in a statement emailed to the Journal this morning.

“We are just adjusting to the financial times like every government agency, business and household,” said Slattery. “These are tough times, but I'm sure we'll come out on the other end stronger and even more resilient. These times really bring home the mantra of local sustainability, supporting local businesses and each other.”

Slattery, who is currently also the city's director of community services, is inheriting a slew of cuts to city services as he steps into the role recently vacated by outgoing City Manager Dean Lotter, who left the city with a parting severance of $129,000 after a mere four months on the job. Humboldt Bay Fire Joint Powers Authority is slated to receive $1 million less than was estimated last year. (An email for comment was not returned before this article went online.) Park operations is slated to lose around $200,000; youth recreation $100,000. Much of the proposed cuts come in the form of staffing cuts or reclassifications, with the loss of 9.7 full-time-equivalent positions overall. Among the draft reductions in staff and services, the city is “de-allocating” the position of zoo director, which is currently held by Gretchen Ziegler, one of six Eureka staff who have accepted early retirements.

Asked whether or not the “de-allocation” of a director for the Sequoia Park Zoo was permanent, Slattery replied that it would only last until they could bring Ziegler back part time or “train someone to take on the responsibilities,” adding that the responsibilities may fall under a position with a different title.

The Eureka City Council will meet tonight —  virtually, due to COVID-19 —  at 5 p.m. The 2020/21 Fiscal Year Budget is the only item on tonight’s special agenda. We will update accordingly.