The usually bustling Arcata City Plaza, empty in the early days of the pandemic. File photo.

The City of Arcata is planning to reduce its yearly budget by over $1.3 million — which may include layoffs and cutting hours for some city staff — due to the economic impacts of the COVID-19 pandemic. The Arcata City Council will review the proposed yearly budget during tonight’s meeting.

From the Arcata city staff report:

This 2020/2021 Proposed Budget is presented during a time of tremendous change and anxiety for our community. The effects of COVID-19 has upended lives and businesses, and has required extraordinary efforts from us all to limit the pandemic’s reach. As a result, the necessary shelter-in-place restrictions to slow the virus’ spread has severely impacted day-to-day economic activity. Several local and regional businesses have closed and the unemployment rate is spiking. Even though suppression efforts have yielded early successes, we know that the virus is still present, and that restrictions related to social distancing, in some form, will be necessary for an extended period.

A large portion of the city’s general fund comes from sales tax, transaction and use tax (TUT) and transient occupancy tax (TOT), which have all been greatly impacted in Arcata by the county’s shelter-in-place orders, according to the staff report. And, although restrictions are loosening and businesses reopening, the city projects a significant decrease in these revenue sources for the year.

During a budget study session on May 27 — the second of two budget sessions the council held in May — Arcata city staff presented the council with three different budget options, which estimated revenue decreases based on different projected dates when SIP orders might be lifted. The council directed staff to build an initial budget around the “best case scenario,” which projects SIP to end on July 1.

Projected tax revenue decreases from the City of Arcata’s budge proposal.

Even this “best case scenario” requires the city to significantly slash the budget and projects a 29 percent decrease in sales and TUT taxes and a 38 percent decrease in transient occupancy tax for the city. This scenario leaves the city with about “the same budget we had ten years ago,” Diemer told the council during the study session.

The estimates also take HSU procedures into account and are based on a scenario where the university has 100 percent virtual instruction for the upcoming fall semester. HSU did recently announce plans to hold some in-person classes in the fall, though the majority of instruction will be online.

The budget plan recommends significant cuts to the city’s personnel costs, including freezing 10 currently or anticipated vacant positions in the Arcata Police Department, maintenance, community development and recreation departments, and includes “layoffs of two additional positions on January 1, 2021 if other savings are not realized,” the report states.

If approved, the budget plan also would eliminate city vehicle purchases, reduce public transportation, eliminate the Plaza improvement funds and reduce funding contributions to the Arcata Chamber, Arcata Main Street and the Film Commission.            

“City staff has carefully considered the budget requests proposed by each department in conjunction with the City Council goals and objectives,” the report states “This year in particular, to present budget alternatives, significant service reductions were made to reduce costs.”


In related business, the council will also consider approving a special tax measure for the November ballot to fund improvement and maintenance of city parks, trails and open spaces. The measure asks voters to approve an annual parcel tax of either $35 or $37 (the amount has not yet been decided.) 

As currently written, the measure poses the following question: 

To protect and preserve natural open space areas for future generations by: improving and maintaining parks, open spaces and trails; protecting land around creeks, rivers and streams to prevent pollution and improve water quality; protecting redwood forests, wildlife habitat, working lands, scenic hillsides, and agricultural land; expanding public access and trail systems; shall the City of Arcata levy a special tax of ($35) or ($37) annually per parcel providing approximately $175,000 annually until ended by voters, with citizen oversight and all funds benefiting local open space, as set forth in City Council Resolution 190-68?   

If placed on the November ballot, the measure would need a two-thirds voter approval to pass.


The council will discuss these and other important issues during a zoom meeting tonight at 6:00 p.m. You can view the full agenda here.

You can view the meeting live on Access Humboldt Channel 11, streaming on the City of Arcata’s website or on the city’s YouTube channel.

The council will discuss these and other important issues during a zoom meeting tonight at 6:00 p.m. You can view the full agenda here.