Along with the economic downturn brought about the coronavirus pandemic, local governments are finding themselves re-evaluating budgets as they continue to provide vital services to their residents.
Take Williamsburg for instance.
Despite creating a strong budget in January, the Williamsburg City Council finds itself reassessing its financial strategy for the end of 2020 and the entirety of 2021 to accommodate changes to the economy as a result of the coronavirus.
“We at the city have already started planning for how we as the Williamsburg community and a greater region will emerge from the stay at home directive from the governor,” City Manager Andrew Trivette said during a City Council meeting Thursday. “I think it’s fair to recognize that it’s unlikely that it will just be the ringing of the bell and everyone will go back to normal just as it was.”
With fiscal year 2020 set to complete at the end of June, Trivette said there’s only but so much of the city’s revenues that can under-perform in such a short amount of time. However, he added it is entirely possible for the revenues to under-perform because a large part of the city’s budget is based on the tourism tax collected.
But as the community restrictions continue without a finite end, the city also has to plan for how it will impact at least the first quarter of fiscal year 2021, which will begin in July.
Trivette, alongside city staff, has created a new plan that proposes conservative actions on the city’s current and future budget proposals in order to prepare for the worst case scenario.
“As we know in Williamsburg financial history, much of our financial strength is based on the fact that we budget conservative,” Trivette said. “The product of that conservative budget is that when we finish the fiscal year, we have hefty surpluses in revenue…and in savings.”
If the city were to continue with its current budget plan, it would exceed its spending by $4.2 million for fiscal year 2020. Based on worst case scenario, fiscal year 2021 would have a deficit of approximately $6.5 million.
Trivette suggested a similar three-part strategy for both fiscal years to address that.
First would be to look at the city’s capital improvement plans, which is typically planned for a five-year span. As fiscal year 2020 is already mostly over, Trivette said there are many projects that have been completed but also those that haven’t even been started yet.
Trivette identified two categories of spending in regards to projects: the first are those that were completed but were underfunded in their budget and the second are projects that can be put off to a later date.
He said the city could capture any excess funds from underfunded projects and then save money also by pushing some projects back.
The second step would be to look at funding that’s already available and uncommitted, mostly from the city’s tourism development fund that’s intended for grant projects in the tourism sector.
The third step would be to look into the “very healthy” reserve fund.
The combination of those three steps would help the city bridge the gap of the deficits in the present and coming fiscal years, Trivette said.
“What’s important about this strategy is that it allows us to operate the government as citizens expected us to do for years,” Trivette said. “We don’t want to damage or impact service.”
However, Trivette said it is important to note the plan is based on the worst case scenario and the economy could bounce back better than projected by the new strategy.
The budget was originally scheduled to be delivered to the City Council in March but the council members approved postponing the public budget by 30 days.
The new schedule plans to have the budget delivered to City Council on April 20, presented to the public on May 11 and May 14 and then adopted in June.
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