Title
Public Hearing on Resolution Declaring Exigent Financial Circumstances
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to hold a public hearing on a resolution declaring that the City is experiencing exigent financial circumstances. After closing the public hearing, move to adopt the resolution.
Report
Issue:
Whether to hold a public hearing and approve a resolution declaring that the City is experiencing exigent financial circumstances.
Staff Contact:
Jay Burney, Interim City Manager, 360.753.8447
Paul Simmons, Parks, Arts and Recreation Director, 360.753.8462
Debbie Sullivan, Administrative Services Director, 360.753.8325
Presenter(s):
Paul Simmons, Parks, Arts and Recreation Director
Background and Analysis:
The global pandemic and associated impacts have led to the temporary closure of many Olympia businesses. This will result in a dramatic reduction of sales tax revenues for the City in 2020, and potentially beyond, depending on the length and severity of this crisis. The substantial reduction of sales tax revenues will result in an “exigent financial circumstance” for the City of Olympia. As the City works to respond to this unprecedented and unpredictable new reality, all financial options will need to be considered as we protect and preserve critical City services.
Section 4.1.1 (i.) of the Interlocal Agreement between the City of Olympia and the Olympia Metropolitan Park District (OMPD) Board (the Agreement) states that barring an “exigent financial circumstance” 11 percent of the City’s General Fund revenues shall go to support the Olympia Parks, Arts and Recreation Department (OPARD). Section 4.1.1 (ii.) of the Agreement commits to use the 2 Percent Voted Utility Tax (VUT) revenues to acquire new park land and to maintain and develop those acquired park properties, with a priority on acquisition, to the extent practicable. Section 4.1.1 (iv.) of the Agreement adds that, again barring an “exigent financial circumstance,” the City intends to allocate the first $500,000 of year-end fund balance to park land acquisition.
Recognizing that each department will be forced to make cuts to preserve critical City services, this may result in OPARD’s share of the City budget being less than the 11 percent previously budgeted General Fund for 2020. Another option under consideration is to transfer VUT money from the existing acquisition budget to the operating budget in order to preserve core maintenance functions. Lastly, the City will also consider transferring $423,190, which is the amount budgeted for 2020, from the Non-Voted Utility Tax acquisition fund to support critical City-services.
Our hope is that this global pandemic is short-lived and that the economy quickly rebounds. Since the duration of the pandemic is unknown, staff recommends declaring exigent financial circumstances for both the remainder of the 2020 budget cycle, as well as for 2021.
Neighborhood/Community Interests (if known):
The YES Olympia Parks Coalition was heavily involved in the formation of the Olympia Metropolitan Park District and some of their members continue to take a strong interest in financial issues related to the OMPD. Department staff have met with key stakeholders and shared the intent of this recommendation. While temporarily reallocating park land acquisition funds for a year or two in response to this crisis may be disappointing for some members of the community, it should be noted that the City has made substantial progress meeting its park land acquisition goals. Since passage of the 2015 OMPD funding measure, the City has added 367 acres to its park inventory and is now just 45 acres short of the 500-acre acquisition goal. As a part of the 367 acres, the City has acquired an 84-acre property to address the long-standing “community park’ and soccer field need, and four of the ten identified neighborhood parks that are needed to meet the demand of population growth.
Options:
Following the close of the public hearing:
1. Approve the resolution (via the required super majority) approving the declaration of exigent financial circumstances.
2. Do not approve the resolution.
Financial Impact:
With a declaration of exigent financial circumstances, City staff would have the ability to make budget adjustments as necessary to balance the City’s 2020 and 2021 budgets without being constrained by either the 11 percent requirement or $500,000 land acquisition requirements called out in Ssection 4.1.1. of the Agreement. Additionally, there will likely be a need to shift previously allocated acquisition resources to preserve core maintenance levels.
Attachments:
Resolution