City of Solvang removes all non-essential employees due to economic cessation

SOLVANG, Calif. - The City of Solvang declared a State of Emergency on March 20, after coming under extreme financial pressure due to the lack of tourism from the coronavirus pandemic. As a result of this economic pressure, Solvang decided to begin eliminating all non-essential positions on Friday.

This is being done in an effort to ensure the City's financial position is sustainable for as long as this pandemic is in place.

Solvang said that, at a Special Emergency Meeting, the City Council discussed the fact that the City is extremely reliant on tourism-related revenues, particularly Transient Occupancy Tax from hotel stays and sales tax from restaurants, bars and wine tasing rooms.

Since those have been shut down for the foreseeable future, the City is expecting to lose about $500,000 per month. The City said it would take months and possibly years for Solvang to see a full economic recovery once businesses can reopen.

Solvang said the City's pension plan (CalPERS) has also suffered large losses in investments and the burden to pay will be passed to the City before long.

It is under the City's obligation to provide essential services and balance its economic health that Solvang has decided to eliminate all non-essential positions.

The City said on Friday, it already laid off eight positions. Already vacant positions will not be filled as well in order to continue being able to employ those who provide essential services.

Solvang said the core services it provides to its residents is first water, wastewater maintenance and public safety.

Solvang's law enforcement services are provided through a contract with the Santa Barbara County Sheriff's Department and the City is responsible for payment.

At this time, Federal aid is geared toward public health services and emergency management operations. The economic stimulus package also includes funding to help workforce and businesses, but there is no assistance for Cities who are experiencing a loss of revenue.

Mayor Toussaint of Solvang will be releasing another message Saturday evening.