Redwood City welcomes first cannabis dispensary

Facing deficits, Redwood City proposes increases to police budget, salaries for top officials

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As Redwood City grapples with projected budget deficits due to the COVID-19 pandemic and amid communitywide calls for police reform, the city is proposing pay raises for top officials and an increase to its police budget. Meanwhile, the budget proposed for 2020-2021 reduces overall spending on parks, recreation and community services.

At tonight’s meeting, the Redwood City council is set to review a budget proposal to solve a $10.1 million deficit next fiscal year that increases the police budget by $2.3 million, from about $46.6 million to $48.9 million, while cutting its overall funding of parks, recreation and community services by $520,000, from about $19.5 million to just under $19 million. The budget for police patrols is increased by $1.3 million, from $28.3 million to $29.6 million.

See the full proposed budget here.

Meanwhile, the city council tonight is also set to review a proposal to increase the annual salaries of City Manager Melissa Stevenson Diaz and City Attorney Veronica Ramirez, who make $295,008 and $251,604, respectively. The pay raises were delayed from 2019, the city said. In late March, the proposed pay raises for the top city officials were shelved amid uncertainty surrounding the COVID-19 pandemic and to better enable the public’s ability to chime in on the matter. With that uncertainty ongoing, the proposal is back on the council agenda, but with adjustments. Due to COVID-19, according to city documents, both the city manager and city attorney requested to forgo their 3-percent merit increase from 2019, as granted by an ad hoc committee that reviews their performance annually. Also, they agreed to forgo a planned 1-percent internal equity adjustment. The ad hoc committee recommends instead that both positions receive a 3 percent cost of living adjustment for 2019.

Some in the community have questioned pay raises for top officials in city government at a time when many in the community are suffering amid the shelter-in-place order. Redwood City businesses thriving before the shelter-in-place order are now struggling, as evidenced in projections for sales tax revenues to the city, which are the second largest contributor of revenue to the city budget behind property taxes. Sales tax revenue is forecast to drop by 5 percent next fiscal year compared with 2019-2020, and to decrease by another 1.3 percent in 2021-22 before ticking back up again. However, the city warned that it cannot fully predict how local businesses will rebound from the recession, with COVID-19  social distancing protocols expected as well as probable changes in consumer behavior.

“…Auto sales are among the top 10 sources of sales tax paid to the city and dealerships currently are permitted to repair cars, sell auto supplies, and only sell vehicles online or by phone,” the city said in documents. “Restaurant activity also contributes significantly to the city’s sales tax base, and restaurant sales are expected to plummet due to requirements to provide food only for take-out or delivery.”

Those impacts were partly offset by large retailers deemed essential during the shelter-in-place period, online retailers headquartered in the city and also online retailers complying with new legislation related to the South Dakota vs. Wayfair case, the city said.

Tax revenue from hotels and similar businesses, called transient occupancy tax, is expected to decrease by 31.3 percent compared to the 2019-2020 fiscal year, and the utility users’ tax revenue is projected to decrease by 5.4 percent over the same period.

The unexpected recession also came in the middle of city efforts to deal with significantly rising pension costs. The annual CalPERS payment is projected at $43 million in 10 years, or $12.8 million more than next fiscal year’s payment of $30.2 million.

Redwood City’s proposed budget for next fiscal year includes $292.9 million in revenues and $292.6 million in expenditures, with a general fund of $148.3 million. Police and fire department salaries account for $67.5 million, or 66.8 percent of all salaries, wages and benefits in the general fund, the city said.

The City Council meets tonight at 7 p.m. on Zoom. To view the agenda and to find out how to join the meeting, go here.