Image of City Manager Joe Lopez

City Manager's Blog

Jul 28

Adopting a Budget for the 2020-2021 Fiscal Year

Posted on July 28, 2020 at 2:38 PM by Thomas Reeves

Each year at about this time, your City leadership team works hard to craft a citywide budget that reflects an optimism that our employees will have the resources required to provide essential services, and also a bit of realism that balancing revenues and expenses has become harder and harder.  This year is certainly no exception given how much our world has changed in 2020.

In the midst of a global pandemic that has hit our local economy hard, the team has worked together to prepare a conservative budget in the midst of uncertainty.  Never before have we embarked on a new fiscal year with so much uncertainty about the health of our economy and the tax revenue to support the services we provide to the community.  The pandemic has triggered several potential new funding sources from the State and Federal Government for this coming year, but the amount, timing, and sustainability of such is unknown.  We remain hopeful that additional funds will be allocated, but there is no guarantee.

We cannot continue with “Business as usual” with our historical allocation of resources given the current stream of tax revenues.  Although our full-time employee count has remained steady at around 1,225 for the past five years, our employee-related expenses has grown considerably.  Quite simply, this City’s expenses have outpaced its revenues, and we need to make considerable progress in creating a more sustainable budget for the future.   

In pursuit of this goal, every department and labor group has been requested to make concessions, and there will be impacts to public safety and quality of life services, including our recreation program, streets program, and parks maintenance.  Our employees will be asked to make changes to the way in which they provide essential services to our constituents, and they will be asked to help redefine our operations according to the most pressing priorities.  Make no mistake, our residents, businesses, and visitors may notice a reduction in the services we’re able to offer, though I’m confident our resilient City will adapt, innovate, and even excel in the extraordinary times in which we find ourselves.

We’ve also been forced to make difficult reductions in our current and planned staffing levels. Unfortunately, our current workforce will be reduced by several filled positions, and those individuals have been informed of these decisions.  Additionally, 73 currently vacant positions have been eliminated and will not be filled.  We worked closely with our labor partners in identifying concessions – including furloughs – to mitigate additional position reductions. I sincerely appreciate the willingness of most of our labor partners who came to the table for those discussions, and the understanding members showed in doing what is best for the organization.
    
The process of delivering these actions has been gut-wrenching.  I fully recognize these actions directly affect lives and workloads, and I am calling on our entire team to move forward with sensitivity and support of one another.  Even as we work within our new financial restraints, I am committed to supporting our employees with as much of the resources as we have available to their work and development.  

One thing is clear: we will not be the same City at the end of the year as when we started, though I believe we’ll be a better City than ever before.  However, we will weather this storm if we work together and remain customer-focused, innovative, and accountable to our community.

Joe
Jul 28

Progress on Addressing Homelessness

Posted on July 28, 2020 at 2:38 PM by Thomas Reeves

ORIGINALLY POSTED ON 7/5/2019

Homelessness is unique to every city that we visit or live in and is something that cannot be solved overnight or with a simple fix.  Here in the city of Modesto there are an estimated 1,400 homeless people. There could be several reasons that one could become homeless but some of the more prevalent reasons are because of: mental health issues, loss of employment/income, drug use/addiction, criminal behavior/history, unemployed due to inability or unwillingness to work, or choice of life.

Some of these can be worked through quickly; others can take a long time. So, our vision for the homeless population has been to reduce the negative impact of vagrancy behavior by collaborating with Stanislaus county to get our homeless the help they need through services, shelter and housing.  

We’ve made progress in this regard, and the most visible project has been the creation of the Modesto Outdoor Emergency Shelter (MOES), located underneath the Ninth Street Bridge. MOES is our city’s initiative to follow the Ninth Circuit ruling that it is unconstitutional to ban homeless people from sleeping on the streets. It is home to an upwards of 400 people, and these tenants have access to service providers every day to help them with making appointments, career placements, finding permanent housing and more. By having these services at MOES, there have been several people who have transitioned out of MOES and are beginning to rebuild their lives.

Modesto also has initiated the Downtown Streets Team, an organization that hires homeless (or at-risk of becoming homeless) people to be a team member that works on beautification projects in the city. Then, the team members receive a non-cash stipend to cover their basic needs and help them to transition to employment and find a home. 

The next exciting step in the overall program to address homelessness is the expansion of our Salvation Army Shelter on Ninth Street! Together with the county, we are putting in an access center, 182 more beds and a full kitchen. The access center will be home to onsite service providers and this means that there will be new job opportunities on the market for our community to take advantage of. Come this fall we will be offering this new shelter to the homeless community, and returning the MOES space back to the Tuolumne River Trust. 

Modesto is a community that loves to help, and I couldn’t be more grateful for that. When it comes to our homeless, I know they are in good hands. Our service providers are ready and on-site to get them the tools they need, and the community is ready to give donations to shelters. 

And what is powerful is that our homeless are taking advantage of the help, and many are taking the initiative to begin to transform their lives.

Learn more about how you can help!
May 28

The State Can Help Ease Local COVID-19 Budget Challenges. But will it?

Posted on May 28, 2020 at 4:46 PM by Thomas Reeves

It's no secret the City of Modesto's budget has been impacted greatly by the COVID-19 pandemic, and the Governor's budget for Fiscal Year 2020/2021 does not go deep enough in assisting California cities of our size.  Below is an excerpt from a letter I've written to our state legislators asking for advocacy on our behalf.

As you may know, during the Senate Budget and Fiscal Review Subcommittee No. 4, the Governor’s Administration clarified that the $450 million of CARES funds dedicated to cities will be split with $225M going to seven cities with populations between 300,000 and 500,000 and the other $225M for cities with populations under 300,000. This puts Modesto five cities away from funding (as the 18th largest city in the State of California), and based on our calculation Modesto would only receive approximately $2.2M for COVID-19 expenses. 

This funding formula provides seven communities with a total population of approximately 2.6M the same amount of funding as 469 smaller cities with a population of 22.1M. When viewed on a person by person basis, cities with populations above 300,000 will receive funding equal to $85.59 per resident, while the other 469 cities will receive funding equivalent to $10.18 per resident.  We implore you to work with the Governor and your colleagues in the Legislature to revisit this formula and recommend a more equitable solution. 

Specifically, we would recommend that you consider the below revisions, either separately or as a combination of the two:
  • More equitable split of funds between cities – As noted above, half of the $450 million of Coronavirus Relief Fund (CRF) is proposed to go to communities that represent 10.5% of the California residents eligible to receive funding, while the other half of funding goes to communities representing 89.5% of eligible residents. As an example that further demonstrates the disparity, under the current formula, the City of Modesto would receive $26.9 million less than the City of Stockton, despite only having 97,000 fewer residents. We would recommend a split of the funding that would provide more equal funding to all California cities.  For these reasons,  the City proposes an equal distribution of funds by population, which would result in smaller cities receiving critical financial relief.  
  • Increase overall level of funding provided to cities – The May Revise proposal for distribution of Coronavirus Relief Funds provides $450 million to cities and $1.3 billion to counties.  Additionally, the proposal does not provide any funding for cities that received direct allocations of CRF funding from the federal government; however, the May Revise proposal provides approximately $644.5 million in funding to counties that have already received direct allocations of CRF funding from the local government.  We would recommend that the Legislature revise the funding distribution split between cities and counties to ensure that those entities who have not yet received any CRF funding have access to these vital funds.  To that end, we would recommend that the CRF allocations be revised to provide $1 billion to counties and $750 million to cities.  This distribution split would ensure that the 476 communities that have not received any CRF funding, will be provided additional resources.
COVID-19 has decimated Modesto’s local economy. As a result of the Governor’s stay at home order and the sales tax deferral program, these impacts are estimated to amount to $11.3M. Additionally, our unanticipated expenses include the rapid activation of an emergency operations center, procurement of personal protective equipment, initiation of frequent facility sanitizing, and other essential costs required to ensure the safety of the public and employees are expected to easily exceed the allocation of funding that the City would receive under the current May Revise proposal. 

As we’ve experienced over the course of the past couple of months, COVID-19 has not shown mercy to jurisdictional boundaries or industries. For these reasons, the City of Modesto proposes a funding formula that is fair to all cities and strongly opposes the arbitrary allocation of funds to larger communities at the expense of smaller cities, and requests your support. We are happy to meet with your office to discuss potential options that we can explore to ensure that all cities can meet this moment.