Kevin L. Hoover
Mad River Union
ARCATA – The City Council last week renewed the local emergency related to the coronavirus pandemic, something it does every two weeks to better empower it to manage the unusual circumstances surrounding the crisis, and make it eligible for further assistance.
The council heard a review of city finances affected by the pandemic. The city’s 2020/2021 budget included large cuts in anticipation of reduced tax revenue. The recent reassignment of Humboldt County to the more restricted Red Tier is expected to further hit tax income from retail and restaurants. (Note: since this story was published, Humboldt has entered the Purple Tier, further limiting business activity. – Ed.)
Trending lower are recreation fees, facility rentals and parking fines. While hotels are filled with those seeking relief from pandemic conditions elsewhere, stays going beyond 30 days may not produce revenue under the 10 percent Transient Occupancy Tax, resulting in lower revenue. Meanwhile, wastewater fee revenue is trending only about 1 percent below estimates.
On the up side, the city’s .75 cent Transactions and Use (TUT) sales tax is at or above projections. Deferred TUT taxes amount to $194,000, though nearly $87,000 of that has been paid, leaving a $107,000 balance. But some businesses have failed, and may never pay their outstanding tax debt.
Statewide, second quarter sales tax was down 16.3 percent, and Arcata averaged 16 percent, though the “Far North” as a region was down just 4.4 percent. A line-by-line mid-year budget review is scheduled for February.
The council also delayed enforcement of a key waste reduction initiative, Ordinance No. 1527, passed in March just before the pandemic hit. That ordinance restricted single-use plastic foodware in restaurants and take-outs, and was set to go into effect in January.
While some restaurants have implemented the new policies, most, hit hard by the pandemic, have told the city that the required 25 cent fee for use of plastic items or for bringing in their own foodware presents an additional burden to maintaining a viable business. They’ve asked for a delay in enforcement until conditions might return to normal. The council unanimously agreed to suspend enforcement six months, until July of 2021.