Grass Valley prepares for budget shortfall due to COVID-19 shutdown

Local News
This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

GRASS VALLEY, Calif. (KTXL) — The city of Grass Valley will get a head start Tuesday night on confronting the financial impact of the COVID-19 shutdown.

City council members will vote on an emergency resolution, giving them the power to lay off employees, and will adjust its budget to reflect a revenue shortfall.

Grass Valley has a population of around 13,000 and relies on tourist dollars.

“Once we saw what was going to happen to our funding stream in the city, we knew that we were going to have to take steps to get ahead of it,” said Grass Valley Mayor Lisa Swarthout.

The city is looking at a drop in sales tax, hotel tax and development revenue of nearly a million dollars between 2020 and 2021. The city’s general fund budget is just $11 million.

Four city administrative staffers will likely lose their jobs, which is big for a tiny city.

Fire and police jobs were spared.

“Public safety for a small community like ours is … it’s one of our number one responsibilities here and we need to make sure that people are safe,” said Swarthout.

Seven positions, including a police officer opening and three fire paramedics jobs, will go unfilled.

Swarthout, who ran a clothing shop for 30 years, knows the pain retailers are feeling.

What the Grass Valley is dealing with now foreshadows what every municipality and city in the state must confront sooner or later.

Cities the size of Sacramento, Stockton or Modesto may be able to rely on budget reserves or state bailouts but their potential revenue losses will be much larger.

“Eventually, all cities are really going to have to look at their general fund budgets to see what they can do to maintain their essential services,” said Swarthout.

Even when stay-at-home restrictions are lifted, Grass Valley officials expect city income to remain low well into 2021.

“I think people will be a little bit more reluctant to go out at first, especially for social gatherings,” explained Swarthout. “So it’s going to take a while for us to see our revenue stream come back.”

Grass Valley is taking a proactive approach.

Most cities will not put out budget proposals for the next fiscal year until May. 

Grass Valley officials say economic projections could change in the coming weeks but feel they are taking a realistic approach in planning for the coming year.

Don't miss

More Featured

Latest News

More News