2020 has proven to be as unpredictable and challenging as years come. Between relentless wildfires burning all around our community, the resulting unhealthy air quality keeping us indoors, and the ongoing health crisis and economic distress due to the COVID-19 pandemic, this year has not gone as planned. And we will see the ramifications of 2020 for years to come. However, I continue to be overwhelmingly grateful for the hard work, perseverance and flexibility of our City of Napa staff and the community we serve.
Our Council and staff have stayed committed to ensuring essential services remain available. In March 2020, we immediately recognized the significant impact that COVID-19 would have on our City resources. Because of the incredible work of all of our Departments and staff in reducing our operational costs since the start of this pandemic, we were able to end Fiscal Year (FY) 2019/20 without having to impact the funding that Council authorized to use (if needed) to balance the budget. At the close of FY 2019/20 on June 30, the City had lost approximately $9 million in anticipated revenue--very close to what we had projected. I thank our Finance staff and Dr. Robert Eyler of Sonoma State University for helping provide an incredibly accurate framework so we could create realistic plans.
We have reduced expenses across all Departments to meet the current moment. In fact, our reduced expenditures last fiscal year were more than we had originally anticipated. But today's solutions are only short-term fixes for long-term problems. Although our cost reductions allowed the City to avoid needing additional resources to balance the budget, the City's financial situation remains stressed and that is forcing the City to re-evaluate its priorities.
For example, the City had to indefinitely suspend the Civic Center Project to offset our revenue shortfall. Without this capital project, the City must address the current condition of our outdated City Hall and facilities. Even though some staff are working virtually from home, we are taking advantage of this time to focus on maintenance so both staff and our community can conduct business safely when they are ready to return to City Hall. My recommendation to Council will be to restore $1 million to the Public Works Department for maintenance needs. This funding is typically provided annually, and is only available now because of the serious attention our staff paid to cost control earlier this year.
Implementing these efficiencies is only as good as the staff available to complete these projects. Our dedicated staff have continued to communicate important happenings, prepare for emergencies, address homelessness in the City, work with local businesses and more. But keep in mind: our significantly smaller workforce is also now working with significantly less funds to meet the demands of our situation. While we may appear unaffected by these changes, we are stretching ourselves thin to keep the City operating as efficiently as we can.
Currently, the City has more than 70 positions vacant (spread across City departments) to try and close the gap in funding for the current FY 2020/21. These vacant positions mean our City Council and employees are taking on more responsibilities and trying to balance priorities to ensure the City’s core services continue operating—all while the City remains in a state of emergency.
Although unsustainable in the long-term, these operational budget reductions and position vacancies provide us with a temporary solution to achieve a balanced budget and offset the significant reduction in revenue we are experiencing. It’s because of these efforts I am glad to announce: unless we experience additional unplanned decreases of revenue from our budget, we will avoid any impacts to employees through concessions or layoffs this fiscal year.
As we move forward, our focus will shift to the development of the FY 2021/22 budget and how we can begin addressing the unsustainable level of staff vacancies and operational budget cuts, as well as the need to address outstanding liabilities such as facility maintenance, employee pension liability, and community priorities.
I don’t say all this to scare you or dampen your spirits, but rather to offer an open look at where we are as a City. While we may not have all the answers right now, we deeply value transparency with our residents and staff, evidenced by our recent award for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA). We will continue to be open and honest about our financial situation as we know more and our fiscal future is clearer. For now, visit our updated Budget webpage that outlines exactly where our projected budgets are falling short and what the City is doing to address these deficits.
I will close by saying that, while we are facing a multitude of uncertainties and challenges, the City is dedicated to pushing forward together and ensuring you are aware of our current situation. We will continue to communicate with you all about City matters. I encourage you to subscribe to our emails and follow us on social media: @CityofNapa on Facebook, Nextdoor, Instagram and Twitter.
Again, I am extremely grateful for the hardworking staff around me and for our community that continues to show me how kind, strong and determined Napa can be. I would not want to face these challenges alongside anyone else. Keep pressing on.