The Morro Bay City Council approved a second round of grants for small businesses in the city and discussed the uncertainty surrounding its budget at a Dec. 8 special meeting.

The council agreed to allocate $50,000 for the grant program, which first launched in October with $84,000.

• Screenshot Courtesy Of YouTube
• ROCK SOLID By operating on a conservative budget the city of Morro Bay is able to offer a second round of small business grants to its local businesses.

Any active Morro Bay business owner with 25 or fewer employees and in good standing with the city and COVID-19 requirements is encouraged to apply. The deadline for applications is the end of December, and the city is planning to award the grants in early January 2021.

The program is funded entirely by the city's allocation of Senate Bill 1090 funds, intended to support economic development. The first round of grants supported 20 businesses and their employees.

At the Dec. 8 meeting, the council also reviewed its 2020-21 first quarter budget performance and status report—a three-month review that ended on Sept. 30.

This year's budget has been very unusual, Mayor John Headding said during the virtual meeting.

"It's a very conservative budget. However, a majority of it is really balanced based upon significant depletion of general fund emergency reserve, which continues to concern me," Headding said.

"If we realize our plan as per this budget, we will deplete our general fund emergency reserve almost by 63 percent," he continued, "leaving very little for the many number of uncertainties that have been listed by staff in this report and other uncertainties such as CalPERS that are plaguing us and many other cities."

According to a city staff report, California's recent stay-at-home order is compounding the budget uncertainties. During the first stay-at-home order in March, the city experienced dramatic declines in transient occupancy tax from hotel stays and sales tax.

Despite the concerns, the council approved funding for repairs and repavement at a police department parking annex; for rent relief and lease site improvements for the harbor operating fund; to fill a police officer vacancy; to study parking management strategies; and for wayfinding signs.

The Police Department allocation will go to repair a parking lot damaged during a neighborhood construction project. Police Chief Jody Cox told the council that the lot is not only used for law enforcement vehicles, but for storage as well. The cost of repairs is estimated to be about $10,000; the responsible party for the damage will reimburse the city for the costs of repair.

The council also approved using $52,400 in sales tax revenue to hire a new police officer—a position Cox said has been vacant for some time.

Currently, the Harbor Department is not charging penalties or late fees to its lease holders in the water. The council authorized a one-year suspension of the consumer price index increase to lease rent rates to assist holders through the challenges of the pandemic. The suspension will result in a $34,000 reduction in anticipated revenue. Δ