Mayor announces $39 million shortfall for Fresno's budget

FRESNO, Calif. (KFSN) -- City leaders are looking for ways to cut spending in the wake of 'stay at home' orders.

Mayor Lee Brand announced Tuesday a $39 million shortfall for the City of Fresno's budget due to the COVID-19 pandemic - $7 million this year and another $32 million in 2021.

A decline in tax revenue and city services have contributed to the massive deficit.

"We anticipate by September to have the data that we're looking for, for the third and fourth quarter. Having some idea by then how the economy is recovering," said Brand.

Fresno would also know by then how much relief funding the federal government would be providing for cities and counties.

City leaders began the daunting tasking Tuesday of reviewing the budget and coming up with ways to cut spending.

"How do we identify $7 million in reductions this year and $32 million in reductions next year without impacting or reducing significantly services to our citizens and our residents?" said city council president Miguel Arias.

Arias said it's too early to determine if furloughs or job cuts at City Hall will happen.

"We first want to see reduction in consulting contracts, lobbyists, not filling vacant positions and leveraging federal resources that we receive all before we get to the point of layoffs that would have a direct impact on reduction of services for our city."

Arias admitted there are no easy fixes but the City has the benefit of having $35 million in reserve funds.

"The reserve fund was created for emergencies and today we are in two emergency crisis situations. One is COVID-19 and the other one is the expenses related to the death and killing of George Floyd. On top of that add the fact that we are officially in a recession."

The city council Tuesday directed the mayor work on two separate plans to close the budget gap.

"One budget assuming we can use some federal relief money for revenue replacement and a second budget assuming the federal government doesn't bail us out and we have to make immediate cuts," said Arias.

City leaders are expecting to learn within the next 90 days how much if any the city of Fresno will receive from federal relief.