Being home to one of California’s biggest factory outlet malls, Camarillo seems to hold a winning hand as the state’s recession worsens.
But no city is immune to the Golden State’s budget mess, and the uncertainty is frustrating to longtime City Manager Jerry Bankston.
“The absence of a state budget is creating insecurities in Camarillo that are slowing us down every day,” Bankston said. “We’ve stalled most of our projects, and the state’s inaction is preventing us from moving forward on our budget.”
In an effort to understand how the state’s budget gridlock is affecting the Tri-Counties, the Business Times sat down with Bankston and others at the seventh largest city in the region. Camarillo is a case study in how Sacramento’s structural problems quickly trickle down to a municipality that’s already built up reserves and taken other measures to cope with a shortfall in property tax revenue that arrived with the housing crunch.
On the plus side, the Camarillo Premium Outlets have been doing uncommonly well in the recession, which has put the city in what Bankston called a “very stable” starting position heading into the new year.
“We’ve been really, really busy,” said C.J. Teston, a sales clerk at Adriano Goldschmied in the Camarillo Premium Outlets. “We had tons of customers coming through here. Actually, it seems like everyone around here has been doing pretty well. There have been a lot of shoppers out and about, especially near Calvin Klein and Vans. No matter what time of day it is, you can always find people running around with their shopping bags.”
Representatives from almost a dozen stores in the shopping center all reported similar results, noting that retailers targeting women and teens seemed to have more customers in recent months.
Employees at Kate Spade, Dressbarn, Anne Klein, Chico’s and Maternity Works said they’ve seen a jump in traffic in recent months, while PacSun, DC Shoes, Diesel, Hurley and Skechers report an influx of customers shortly after school is dismissed.
Bill Watkins of the University of California, Santa Barbara, Economic Forecast Project mentioned Camarillo’s exceptionally strong retail sector during his Camarillo forecast presentation in November. Retail sales increased at an average of almost 4.5 percent over 2007, much more than neighboring areas.
Furthermore, Watkins expects the per capita retail sales rate to increase another 1.2 percent in 2009.
“By nature, the center tends to do a lot better than other stores,” said Ronnie Campbell, Camarillo’s director of finance. “They get pretty consistent spending, even in times like these, because everyone’s looking for a deal. They really bring in the sales tax revenue.”
General fund still OK
Camarillo’s sales and property tax revenue usually accounts for about 60 percent of the general fund. Currently, the city’s general fund is more robust than most with about 90 percent reserves, a figure Campbell said is “quite healthy.”
“If our sales tax and property tax revenues decrease further than currently projected, that’s when our reserves come into play,” Campbell said. “Depending on how long it takes the state to come out with their budget, we’ll be able to look at our numbers more closely and go from there. We’ll reassesss and rescope our budget, and if we have to backfill from the general fund, that’s what we’ll do.”
He added that Camarillo is fortunate to be on track with its budget, “something that is so totally opposite of the county and the state.
“We did anticipate for the economy this year, though,” Campbell said. “That’s why we’re where we should be. We adjusted down for no-growth or minimum-growth on sales and property tax, and went for a conservative flat line, assuming sales would be slower.”
It’s hard to say exactly how the state budget will affect the city, but Campbell said he and his team are currently going through their mid-year analysis of the Camarillo budget in preparation for the bad news expected to come from Sacramento.
“The effect of the state budget in Camarillo is not going to be good,” said Kirk Lesh, a real estate expert with the UCSB-EFP. “Of course, it will be worse in other places. Other Ventura County cities are going to be hit much harder because they have more jobs in the public sector, which generally means more state money for their general funds, but it doesn’t look like that will be the case this year.”
Lesh noted that 6.6 percent of Camarillo jobs fall within the public sector, compared to an overall 13 percent in Ventura County. He said the fact that Camarillo has relatively few jobs in the public sector should “ease some of the pain” that will undoubtedly accompany the release of the state budget.
Bankston wouldn’t venture a guess at when the state might “get its act together and publish something,” but Campbell mentioned that “the thing that has us most concerned is how the budget will impact Camarillo from a cash flow perspective.”
“If people are getting IOUs, they can’t go out and spend the money, which is what we really need,” Campbell said. “The outlets need people to have money in their pockets if they’re going to be a source of sales tax revenue.”
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