Before the pandemic, Tom Crawford, the city’s chief financial officer and acting administrator, predicted a 3.6 percent increase in recurring general fund revenue and 3.8 percent increase in property taxes in the fiscal year that starts July 1.
That was then. “We’ve got a couple of revenue streams that are going to be hit pretty hard,” Taylor explains by phone from his home office. “State revenue sharing, which derives from sales tax, will be hit hard. The DDA [Downtown Development Authority], under our parking agreement, contributes 20 percent of the parking gross to the city. That’s $3.5 to four million a year to the general fund. In addition, the city also takes 100 percent of parking-related fines [and] a bunch of operational fees.” With businesses closed and parking structures unattended to reduce the risk of transmitting disease, both are way down. Building permit fees and inspection fees will also take a hit.
Altogether, Crawford figures the pandemic’s impact on the city’s $114 million general fund budget could be $4.5 to $5 million in the current fiscal year and $6.3 to $11 million for the next one. Because this is the second year of a two-year budget, Crawford emails that “no major changes are contemplated from the initial plan. However, with the impact of the coronavirus occurring at such a late stage in the budget development process, I anticipate modifications during the fiscal year as the economic impact becomes more clear.”
Some small changes were made when council passed the budget in late May. They voted to postpone a couple of capital projects and to eliminate funding for next winter’s deer cull. Bigger ones will follow.
“Staff will bring forward a number of recommendations for cutting and limitations,” says Taylor. “There are some policies that we have with respect to overfunding of pension and VEBA [retiree benefits] that can be walked back. We put a couple extra million dollars a year into these things and this might not be a time for that.”
Will we fix the damned roads? The city announced nearly ten miles of restoration projects plus nine miles of preventive maintenance work for this summer. Taylor says those will still happen because “most of the street repairs are not through the general fund. They’re through the streets millage or through the street fund. And so while funding for those functions will be reduced because some property tax will be reduced, they won’t be taking the same level of hit.”
Crawford emails that “all essential operations (Water, Police, Fire, Waste Water, Housing Commission, Solid Waste, etc.) remain sufficiently staffed to deliver services and back-up plans are in place to guarantee these services will continue to be delivered.”
Fire chief Mike Kennedy’s plans to replace or rebuild the city’s aging stations are on hold for the moment–but Taylor notes that could change if Washington wants to pay for them.
“We are cognizant of the fact that stimulus funds love first responders,” the mayor says–and “first responder related capital projects.”
