HomeMy WebLinkAboutCC Reso 2020-35 RESOLUTION NO. 2020-35
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CATHEDRAL CITY, CALIFORNIA DECLARING A FISCAL
EMERGENCY
WHEREAS, although the City of Cathedral City has demonstrated excellent fiscal
stewardship by implementing a careful review of all expenditures, adopting and
adhering to fiscal reserve policy, making strategic investments in economic
development projects, and annually balancing City budgets, the worldwide COVID-19
Pandemic has resulted in a devastating impact on the state, national, and local
economy; and,
WHEREAS, the worldwide COVID-19 Pandemic has forced business closures,
reduction in commercial activities, restricted trade, travel and tourism, and high
unemployment, the combination of which has severely impacted the economy and
reduced tax and fee revenues to the City; and,
WHEREAS, the worldwide COVID-19 Pandemic has resulted in unemployment
in the United States ranging as high as 15%, the highest level since the Great
Depression, has led to reductions in US consumer spending by approximately 20%, the
closure or at-risk-of-closure of approximately 7.5 million small businesses in the US,
and a projected reduction in US gross domestic product by approximately 6% for 2020;
and,
WHEREAS, these events have immediate and drastic financial implications for
the City's General Fund Operating Budget which relies significantly on sales tax,
transactions and use tax (TUT), cannabis tax (CMT) and transient occupancy tax (TOT)
revenue generated by the City's various retail businesses, restaurants, hotels and
vacation rentals; and,
WHEREAS, since the Governor's "Emergency Stay-at-Home Order" on March
19, 2020, and projected revenues over the upcoming Fiscal Year, the City estimated
potential budget deficits of $6,327,397 for fiscal year 2019/2020 and $10,752,730 for
Fiscal Year 2020/2021; and,
WHEREAS, despite the best and proactive efforts of the City, including its collective
bargaining groups and unrepresented employees, the City is still projected to have a
General Fund Operating Budget deficit to $2,827,397 for fiscal year 2019/2020 and
$2,420,667 for Fiscal Year 2020/2021; and,
WHEREAS, The federal stimulus bills, including the CARES Act, did not provide
any direct assistance to the City of Cathedral City because it has a population under
500,000, leaving the City to request financial assistance from its State and Federal
representatives which aid has not yet been confirmed or received by the City, and even
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if received is not anticipated to offset the projected budget deficit in Fiscal Years
2019/2020 and 2020/2021; and,
WHEREAS, there continues to be great uncertainty regarding the continuing
COVID-19 Pandemic and consequently there is no reliable time frame for an economic
recovery, but some analysts have projected that a recovery would take five years or
more; and,
WHEREAS, these Pandemic driven events have taken and will continue to take
a significant toll on the City's ability to continue providing its community with the level of
service the community deserves and expects to receive which adversely affects the
public's peace, health, safety and welfare; and
WHEREAS, the City intends to continue its diligent efforts to evaluate and
identify areas for cost savings and working toward the most expeditious recovery of the
local economy feasible given the serious constraints imposed by the worldwide COVID-
19 Pandemic.
NOW, THEEFORE, BE IT RESOLVED by the City Council of the City of
Cathedral City as follows:
1. The City is experiencing an existing and immediate funding crisis, which is
the result of factors largely outside of its control, including the worldwide COVID-
19 Pandemic and the corresponding rapid and significant decreases in revenue
from existing taxes and fees.
2. The City has taken significant steps to reduce its operational costs and will
continue its diligent efforts to evaluate and identify areas for additional cost
savings while working toward the most expeditious recovery of the local economy
feasible given the serious constraints imposed by the worldwide COVID-19
Pandemic.
3. These events and circumstances threaten and are projected to adversely
affect the public peace, health, safety and welfare and because of that threat to
the public peace, health, safety, and welfare, an emergency exists in the City, as
the term "emergency" is used in Article XIIIC, section 2(b) of the California
Constitution. The City must immediately address that emergency by ensuring
that the City has the resources necessary to preserve the public peace, health,
safety, and welfare.
4. Accordingly, the City Council unanimously finds and declares the
existence of a fiscal emergency within the City.
5. The City Council also hereby authorizes a discontinuance of the City's
existing mandatory reserve funding as stated in its adopted reserve policy to the
extent necessary to provide the City with flexibility in budgeting and providing
essential services during the emergency.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the
City of Cathedral City held on this 22nd day of July, 2020, by the following vote:
Ayes: Councilmembers Lamb, Gutierrez and Carnevale; Mayor Pro Tem
Gregory and Mayor Aguilar
Noes: None
Absent: None
Abstain: None
Jo - Aguilar, Mayo"
ATTEST:
JJAZ
Tracey M Inez, City Clerk
APPROVED AS TO FORM:
9//
Eric S. VaIl
Burke, Williams & Sorensen, LLP
City Attorney
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