Discussion set Wednesday on how to spend Modesto’s $47.3 million pandemic windfall
Modesto officials will discuss Wednesday how to spend the $47.3 million the city expects to receive under the $1.9 billion American Rescue Plan, the federal government’s latest pandemic relief effort.
But city officials offered one proposal Monday during the first day of this week’s budget hearings for Modesto’s 2021-22 budget year, which starts July 1.
They proposed spending $4 million of it on police and fire to help balance 2021-22 budget’s roughly $152 million general fund. The fund primarily pays for public safety and typically makes up about a third of the city’s total annual operating budget.
The discussion on the $47.3 million, which will include city staff’s preliminary recommendations, is scheduled to start at 1 p.m.
The City Council’s Finance Committee is holding workshops this week on the budget. The workshops are 9 a.m. to 4 p.m. through Wednesday. Workshops are scheduled 1 to 4 p.m. Thursday and Friday if needed.
Members of the public can attend the meetings and participate through Zoom, the videoconferencing platform, or in person in the basement chambers of Tenth Street Place. Those who attend in person will need to follow such precautions as wearing a mask and practicing physical distancing.
More about the workshops is available at www.modestogov.com/746/Standing-Committees-Agendas-Minutes and then by clicking on the meeting link.
Modesto expects to get half of its $47.3 million in May, along with complete guidance from the U.S. Treasury on how it can spend the money and the balance of the funding a year later.
The money can be spent to respond to the coronavirus public health emergency and its negative economic impacts. Modesto officials have talked about the city’s need for the money to replace its lost revenue, as well as projects that would benefit the community.
City Manager Joe Lopez said at Monday’s budget workshop that the city is heading into this year’s hearings with some optimism and hope because of the $47.3 million. He said the money gives the city the opportunity to make a real difference in some of its long-standing problems.
Lopez also talked about how Modesto faces challenges each year in balancing its budget. He pointed to a consultant’s study from last year that concluded the city has more general fund employees than it can afford as the cost of these employees, including their salaries and benefits, grows faster than the city’s revenues.
Modesto is slowly reducing the number of its general fund employees through attrition, such as deciding whether a position needs to be filled when a worker retires or leaves the city for another reason. The city has a total of about 1,100 employees.
The Finance Committee will forward the budget to the City Council for adoption before the July 1 start of the new budget.
Modesto already has spent or authorized spending more than $8.7 million in federal pandemic relief money on its public safety labor costs. That money came from the CARES Act, the federal government’s first pandemic relief effort from March 2020.
The city received the CARES Act money, which has more restrictions on how it can be spent than the American Rescue Plan, from funding Stanislaus County’s and California’s CARES Act funding.
