Home Borrower Anaheim balances 2021-22 budget – with big borrowing – Orange County Register

Anaheim balances 2021-22 budget – with big borrowing – Orange County Register

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Anaheim will begin the new fiscal year on July 1 with a balanced budget that delivers the services residents expect and improves the community in many ways – but it’s partly backed by loans that will take years to pay off, thanks to the devastating effects. of the pandemic on the city’s main source of income.

Hotel taxes paid to the city fell in March 2020 from more than $ 162 million two years ago to less than $ 25 million this fiscal year, leaving Anaheim executives to scramble to cut costs and fill a giant hole in their budget.

One solution they chose was to borrow. The city recently entered into bond deals for $ 138.8 million, money that is helping close a deficit of more than $ 50 million in fiscal year 2020-2021 and which will be broken down to fill gaps anticipated over the course of the fiscal year. for the next three years. (Officials discussed borrowing up to $ 210 million in March, but the financial situation improved a bit before the city entered the bond market.)

On top of that, the city’s conservative projections show Anaheim is spending funds for rainy days as bond money shrinks, potentially leaving just under $ 11 million – about 3% of the general fund – in reserves in five years.

“We will definitely have a deficit at the start of the new fiscal year which begins July 1 and there is potential for deficits in years three, four and five beyond,” city spokesman Mike said. Lyster, adding: “The only variable that came out was the speed at which the economy is coming back.

The overall budget for the 2021-2022 fiscal year, which city council approved on June 22, is $ 1.8 billion. But just under $ 380 million is the general fund, which is the current spending that funds police and firefighters, parks and land use planning, and other community services. Much of the rest is self-sustaining funds such as electric and water utilities, facility maintenance and other uses.

On the bright side, the 2021-22 budget includes planning or starting projects such as Center Greens park near City Hall, new football fields at La Palma Park, a teenage center at Brookhurst Community Center and a new fire station to serve the Platinum Triangle, where the current population of around 10,000 is expected to triple in the coming years.

Lyster said he would also fund neighborhood projects such as repairing sidewalks and streets and improving the park’s playgrounds and washrooms. State and federal grants and other outside funds often help pay for these kinds of improvements.

City officials said they had cut what they could in the budget during the pandemic, but they were unwilling to dramatically cut services and amenities for residents.

Because a city’s biggest recurring cost is staffing, and Anaheim has already offered an early departure incentive to reduce its ranks, Lyster said the ongoing challenge will be how quickly tourism rebound.

Anaheim received $ 53.3 million in federal stimulus funding in May and will get the same amount next year, but that’s not enough to fill the expected gaps. And the city also expects $ 150 million in cash from the sale of the Angel Stadium property, but officials are yet to count that in budget projections, which has raised questions from a city councilor.

City councilor Jose Moreno, who voted the only no on the 2021-22 budget, asked why the proceeds from the sale of the stadium were nowhere included in the five-year forecast. City finance director Deborah Moreno said this was because it was one-time income, so it wouldn’t be a good idea to plan it for running expenses, and the city is not in able to spend what has already been received until the escrow closes (perhaps at the end of this year or early 2022).

City Councilor Moreno also criticized his colleagues for choosing to borrow tens of millions of dollars and hiring future councils and residents to repay the debt, while refusing to even consider a short-term tax of $ 1. $ on tickets to Disneyland, Angel Stadium and Honda Center – as the city still pays back the remainder of the more than $ 500 million borrowed in 1997 to improve the resort district.

“This budget does not reflect the values ​​that I would like to express to our residents,” he said, adding that the city has “bent over backwards” to help the tourism industry weather the last recession and then the pandemic.

Anaheim’s new bonds last 30 years, but could be redeemed sooner. Including payments on recently issued bonds, the City’s total debt service will represent 14% of the general fund budget in fiscal year 2021-2022.


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