Preview of the Finance Commission Meeting Of October 19, 2020
Despite the COVID-19 crisis, the City has a surplus of over $3 million for Fiscal Year 2019-2020. The Commission is asked to recommend putting that money into Contingency Reserve to pay for an expected shortfall next year.
The Commission is also asked to recommend assigning a police officer to a violence prevention program for Orange County schools (the County will fully reimburse Irvine for it). Also, to recommend a $4.7 million signal synchronization to reduce traffic flow on Barranca Parkway, and to advance a project for the Animal Care Center, among other things.
When and Where
The Commission will meet on Monday, October 19 at 5:30 p.m. Although the meeting isn’t physically open to the public, the City will be broadcast it online via WebEx here: https://bit.ly/2Hg1Lbx
There are several options for public comment.
- Submit an e-comment by clicking on the Finance Committee agenda
- Send an email to the Commission:
- Send comments by mail to: ATTN: FINANCE COMMISSION,” ONE CIVIC CENTER PLAZA, IRVINE, CA 92606
Summary of Agenda Items
Agenda Item 2. Police Contribution to the OC School Mobile Assessment Resource Team (SMART)
SMART provides support to schools in Orange County. It deals with potential threats of violence relating to school campuses. In addition to police officers, the team includes probation officers, a mental health clinician, and an Orange County Deputy District Attorney.
The Irvine Police Department agreed to provide a full-time police officer to SMART, from July 1, 2020 through December 31, 2021. The OC Sheriff’s Office will reimburse Irvine up to $229,294 Fiscal Year 2020-2021, and $114,647 Fiscal Year 2021-22 (current agreement terminates on December 31, 2021).
This agenda item asks the Finance Commission to recommend in favor of:
- Accepting the reimbursement for Fiscal Year 2020-21
- Allocating $229,294 in the budget to provide a full-time police officer to SMART
- Authorizing the City Clerk to attest to IPDs agreement with the County and other cities
The staff report for this item does not identify any negatives to participating in SMART or in accepting reimbursement for it. The staff report also does not indicate the extent to which SMART resources will be devoted to Irvine schools.
Agenda Item 3. Allocating the 2019-20 Budget Surplus to the Contingency Fund
The City will receive $3,094,621 in CARES Act funding not anticipated in the original budget for 2019-20. The Finance Committee can recommend the City Council put that money in the Contingency Reserve Fund. The money will be used in 2020-21 to offset shortfalls anticipated in the General Fund and Building and Safety Fund.
The staff report gives insight into the effect of the COVID situation on the City budget. Some highlights:
- Operating revenues were under budget by approximately $11.6 million (5.6% below budget)
- BUT the City reduced expenditures by $14.7 million through cost-containment, CARES Act funding, and Pension Paydown prepayment savings
- That leaves $3,094,621, which can be put into Contingency Reserve, if approved
Coronavirus Effect on Revenue Sources
- Property Tax revenues exceeded the budget by $2.2 million. Property valuations in the City increased more than 8% in the fiscal year.
- Sales Tax revenues down $4.7 million, or 6.8%, from the prior fiscal year. But benefited from an influx of stimulus payments into the economy and a 22% increase in online sales.
- Hotel Tax revenue dropped $4.6 million, or 27.3%, below budget. In April 2020 it was 93% below the prior year, May 2020 was 87% lower, and June 2020 was 82% lower.
- NOTE: Hotel tax revenue in the City is driven 60% by corporate business travel, 30% by group and event travel, and 10% by leisure travel.
- Program and Service Fees were under budget by $5.7 million, or 41.3%. The State directed Irvine to close facilities and programs. There was virtually no such revenue from March to June 2020.
Agenda Item 4. 2019-20 Capital Improvement and Special Funds Year-End Report
The Commission is asked, among other things, to recommend:
- Continuing 173 capital projects in the City and in the Orange County Great Park. These projects have budgets totaling $244.8 million.
- Approving a new $4.7 million Signal Synchronization project to improve traffic flow on Barranca Parkway from Bake Parkway to Red Hill Avenue.
- Advancing the Animal Care Center/Operational Support Facility Renovation Project and Culver Drive Pavement Rehab Project.