COVID financial shadow passing

The first post-COVID-19 budgets for Garden Grove were passed by the city council Tuesday night as the economy – and the municipal treasury – recover from the impact of the coronavirus pandemic.

With two members absent – George Brietigam and John O’Neill – the council voted 5-0 to approve the budgets of the city and its associated entities such as a housing authority and sanitary district.

“When we approved our last biennial budget in June 2019, little did we know that the global COVID pandemic was looming on the horizon,” said City Manager Scott Stiles. “Garden Grove was not spared from the devastation to come. In addition to the immeasurable human cost, the city lost more than $28 million in hotel tourism revenue over the past 18 months, with more than $10 million in losses expected during this upcoming biennial.”

Stiles said that the city coped by implementing a hiring freeze, putting job recruitment on hold, skipping non-essential travel and deferring other expenses.

“Thankfully, the desperately-needed infusion of more than $48 million in American Rescue Plan funding over the next two years will give us a fighting chance to protect precious reserves, rebuild critical services and plan for facility and infrastructure improvements,” he said.

The all-funds budget is calculated at $337.3 million for 2021-22 and $302.7 million for 2022-23.

Expenses for the fiscal year of 2021-22 for the city are calculated at $176.1 million. Included in that amount is $35.3 million in capital improvements  – such as street pavement and public facilities – made possible by funding under the Rescue Plan Act passed by Congress earlier this year and signed into law by President Joe Biden.

The balanced budget assumes that a major contributor to city coffers, transient occupancy tax (“bed tax”) from hotels, won’t rebound to pre-coronavirus pandemic levels until after fiscal year 2022-2023.

Other key expenditures planned include traffic and parking enforcement, reinvestment in information technology and park reseeding. One of those restored employee positions is in code enforcement.

Some aspects of the budgets for the next two years are unclear as the federal government hasn’t outlined all the details of how and where the “rescue” funds can be spent, the council was told.

Envisioned for future projects are renovations of the police department facility, the city hall building and the main library building, all located in the civic center area.

The next meeting of the council is scheduled for Tuesday, July 13.