Rainy Day Fund to help mitigate COVID-19 impact
Folsom, CA – The Folsom City Council unanimously approved a $213 million Operating Budget and Capital Improvement Plan for the 2020-21 fiscal year, which takes effect July 1, 2020. The spending plan approved at the recent City Council meeting maintains high quality service levels and amenities for the Folsom community.
The adopted Budget marks an end of the annual process of evaluating the City’s fiscal health, community priorities, infrastructure needs, and daily operations. The Budget reflects a $2.3 million reduction in General Fund appropriations compared to the FY19-20 Budget due to the impact of the COVID-19 pandemic.
“Like many other local governments, Folsom’s financial position is under heavy strain due to the COVID-19 pandemic. While this is not the Budget I had anticipated presenting, I believe we delivered a fiscally responsible spending plan that allows the City to deliver consistent, quality programs, services, and activities,” said City Manager Elaine Andersen. “Although the total impact of the COVID-19 emergency on the City’s finances continues to be uncertain, the City of Folsom remains fiscally sound thanks to prudent and conservative planning by the City Council.”
While the City of Folsom began FY 2019-20 in a strong position, the COVID-19 pandemic and related stay-at-home orders will result in an estimated $5.8 million in losses in sales tax, transient occupancy tax, and parks and recreation programming revenues through June 30, 2020.
In FY 2019-20, the City will draw $5.5 million from its reserve fund, reducing the City’s rainy day fund from 20 percent of annual operating expenditures to 12.5 percent. City officials expect to utilize additional reserve funds in FY 2020-21 as well, and reduce the impact of revenue losses by:
- Implementing a hiring freeze, except for critical positions
- Reducing department budgets by 2.3 percent
- Deferring capital purchases, such as vehicles
- Reducing the Parks and Recreation operating budget by $1 million, related to closed facilities and reduced operations during the public health emergency
- Reducing temporary staff budgets in all departments by 50 percent
“We are weathering a very difficult storm, while remaining focused on our fundamental priorities,” said Mayor Sarah Aquino. “As the economy recovers, careful savings, vigilant attention to spending, and a continued sharp eye on our priorities will be critical in maintaining our high service levels to our community in a new economy.”
The Budget includes an operating budget for day-to-day City programs and services and a capital improvement program which funds public construction projects and infrastructure. Projects include:
- Water treatment plant upgrade
- Sewer evaluation and capacity assurance plan
- Capital Southeast Connector Expressway
- Street resurfacing, sewer, and drainage improvements
- Fire Station 38 renovation and modernization
- Folsom Police Station remodel, phase 1
- Steve Miklos Aquatic Center pool renovation and replacement of activity structure
- Community Development permit center
- Folsom Community Center roof replacement
- Light Rail station cameras in the Folsom Historic District