In the current draft of the city budget for next year, expenses exceed revenues by $8.2 million, according to Avalon Finance Director Matthew Baker.
He also said one of the important things to consider is setting up the city to survive the next several years during an Aug. 12 special council study session.
The purpose of the meeting was to discuss the draft of the city’s budget for the next fiscal year.
The council took no action this week.
He later said his goal was to bring the next city budget to the Sept. 1 City Council meeting.
He also said he believes the budget needs more cuts.
“We have to make some tough decisions,” Baker said.
According to Baker, Avalon will have to look at labor to reduce expenses.
However, City Manager Denise Radde said she can’t keep employees on furlough forever.
Mayor Anni Marshall said she would like to look at contract services.
“I don’t think there’s anything that should go untouched,” she said.
During the meeting, City Manager Denise Radde said nothing was off the table.
She also said it was a fine line between making cuts and maintaining pubic health and safety.
Councilmember Yesenia De La Rosa asked what the city’s advertising expenses entailed.
Baker explained that the city has to pay the Islander to publish notices of meetings public agencies.
One savings option Radde suggested was not filling the position vacated by the recent retirement of the Planning Department director.
Councilmember Cinde MacGugan-Cassidy said she believed the council needed to be involved in discussion of a re-organization of the city.
Marshall said she thought cuts could be made to contract services related to events that won’t be taking place, such as JazzTrax (which has been rescheduled to 2021). Marshall also asked about selling the Tuna Club and Yacht Club facilities.
Radde pointed out those would be one-time events that would get rid of city assets. The city needs assets to borrow money.
Avalon city management is looking at borrowing money to maintain General Fund and Harbor Fund operations, according to an Aug. 7 memo to the City Council from city administrators.
Avalon will need to reduce more expenses in order to remain solvent, according to the Aug. 7 memo.
“Over half of our revenue from the General Fund comes from our TOT [short term rental tax],” said Finance Director Matthew Baker Wednesday morning.
According to Baker, all of the city’s employees are at least partly paid from harbor revenues.
In June, cash-basis harbor revenues decreased by almost $2 million. Baker said the city has more about $4 million in reserves.
