Elk Grove signals recovery, OKs $273M budget focused on roads, civic projects, businesses
Elk Grove’s economy weathered the worst of the pandemic on solid footing, the City Council said in unanimously approving a $273 million 2021-22 budget Wednesday night that targets civic and roads projects while stashing away rainy-day cash reserves.
“Sometimes, I’ve been a wet blanket on how the city was able to function” during the pandemic, Elk Grove Councilman Pat Hume said Wednesday night. “It’s heartening to see the city in such a healthy position.”
The spending plan passed 5-0. The 2021-22 budget came in $1.5 million more than finance staffers estimated in their late May preview; the added spending earmarked for the ongoing Grant Line Road widening project between Waterman and Bradshaw roads that is part of the larger Sacramento Capital SouthEast Connector project; tenant and storm drain upgrades and a second phase of improvements in the city’s historic Old Town.
Still, the new budget “shows signals of recovery” from a pandemic 2020 that locked down businesses and idled workers, city budget manager Shay Narayan told the panel. Narayan said the budget “funds priority projects while providing sustainability against future pandemic effects.”
Those priorities include the six-month Kammerer Road construction project that is also part of the connector build; the Preserve at District 56 park and recreation project; and a major overhaul of drainage in the city’s western Laguna, Stonelake and Lakeside communities, staffers said.
Money will also go to thaw a city hiring freeze and pay down pension obligations.
Elk Grove was far from immune from the pandemic’s economic effects. Small businesses and the people who work for them were especially hard hit by months of state-imposed shutdowns to slow the virus’ spread.
Food insecurity — and demand for food assistance — skyrocketed. Affordable housing, already at a premium, was pushed farther out of reach for working families by rising rents and a superheated housing market.
But the city was inoculated from deeper damage by surprisingly strong sales tax revenue out of Elk Grove Auto Mall and retail as well as home sales and construction.
Narayan was optimistic that the city will be able to feed cash reserves and grow departments’ funding balances over the next five years. Narayan forecast that property tax revenue is expected to grow 5% year-over-year during that stretch, while sales tax revenue is also expected to hold steady until 2023-24.
The budget and the strong forecast cheered west Elk Grove Councilman Darren Suen, who said the city’s strong fiscal showing puts it in a better position to help small businesses hit hard by COVID-19.
“This is good news that the city is able to be in better shape. This will allow us to help those businesses that are hurting,” Suen said. “The way the city has managed its funds — increasing revenues, paying pension obligations, the progress we’re making with (the capital improvement program) and public works. I couldn’t be happier with the direction the city is going.”
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