New layoffs and cuts on the table as Monterey stares down $30M loss
MONTEREY, Calif. (KION)
In a conference call with reporters Tuesday, Monterey city leaders described a bleak picture - a drastic decline in tourism revenue, among other COVID-19 hits, has led to expected revenue losses totaling more than 20 million dollars. The hope is to avoid more layoffs on top of the more than 80 city employees who are losing their jobs in June.
In a report released Tuesday night, ahead of Wednesday's "special meeting," it shows that the city is expecting the COVID-19 pandemic will cost them $31 million over the 2019/2020 and 2020/2021 fiscal years. Nothing has been decided yet, but more layoffs, pay concessions and service/program cuts are on the table - including for public safety.
The loss for the current fiscal year, ending June 30, is three million dollars more than originally estimated, now $13 million. For 2020/2021 year, the city is projecting a $18 million dollar hit, which is 21% of their budget.
About 35% of the City’s General Fund is tied into tourism, but travel has just about shut down after the "stay at home" and "shelter in place" orders. Last week, the Monterey County Convention & Visitors Bureau reported "46 of Monterey County’s more than 220 lodging properties are temporarily closed. Hotels that remain open are for essential travel only and for those that need to shelter-in-place."
Tuesday's City Council Agenda report, authored by Finance Director, Lauren Lai, writes that they need to continue speaking with labor groups for concessions to salary, salary-based premiums, and benefits, but layoffs could still happen - "The reality is that without across-the board concessions provided by labor groups the City will need to implement additional layoffs and cuts to city services and programs, including public safety."
The report says the 81 employees already laid off, which they describe as temporary, are receiving a $1,000 severance. 12 (all) city executives, along with police and fire management have made concessions, leading to this fund.
Cuts approved in April reportedly cover much of the 2019/2020 loss, and the city is set to discuss the following decisions for 2020/2021: employee layoffs to reduce costs and services, not appropriating Neighborhood Community Improvement Program projects, one-time use of economic reserves (up to $1 million), one-year suspension for Other Post-Employment Benefits, and new taxes, fees, cost-recoveries, among other possibilities.
The Monterey City Council will receive this report at Wednesday's meeting with further discussion scheduled for June 2. The final adoption of the budget is scheduled for June 16.
Read the report below:
