JAMESTOWN – As governments around the world continue to deal with economic uncertainty caused by COVID-19, local government across the country are also beginning to plan for the uncertainty that lies ahead.
On Monday night the Jamestown City Council joined city administration in a streamed work session and spent a great deal of time discussing COVID-19 and how prepared the city is to deal with the economic fallout.
Mayor Eddie Sundquist told the council members that he’s talked with other mayors from around the state as well as members of his finance team and the exact impact remains unknown.
“We really do not know what this COVID-19 crisis is going to do to our city’s budget. We are projecting anywhere from a $1 million to a $4 million deficit,” Sundquist said.
Total spending for the city’s 2020 budget that was approved last November is $36.6 million. But while the city will likely see a noticeable – if not significant – budget deficit this year, a silver-lining is that the city also saw a budget surplus from 2019.
City Comptroller Joe Bellitto Monday night also reviewed the final unaudited budget numbers from 2019, pointing out that the city finished the year with a surplus of $1.4 million. He said the biggest contributor to that surplus was the city’s health insurance costs being lower than anticipated.
“During some years we’ve had some terrible years with health insurance, but for the past three years we’ve finished in very good shape with our self-insured health insurance program. We’ve started to see some success with our wellness program that was instituted several years ago,” Bellitto said, while adding, “We can’t put total emphasis on that because people have had sicknesses and surgeries [in the past], but in total I think we’re really starting to see some positive changes.”
The 2019 surplus brings the city’s undesignated fund balance up to $3.8 million. But Bellitto cautioned that while the city does have some money in the fund balance reserve that it could use to deal with a likely budget gap, there’s also several non-COVID-19-related concerns that could quickly eat away at it.
“Miscellaneous revenues for the city pretty much remained flat. Our future healthcare liability remains at $162 million… a very staggering number. We talked about our retirement cost is still large, about $3 million, and that has been leveling off. But rates may increase next year based on how the stock market finished on March 31, which was the end of the state’s fiscal year,” Bellitto said.
Bellitto also noted that the pending appellate court decision regarding the contract arbitration ruling with the city police union could have an impact on spending, depending on whether or not the court rules the public safety union does in fact deserve a retroactive salary increase. That 4th Appellate Division in Rochester is currently reviewing that case and could have a decision in the near future.
Another big unknown is the city’s sales tax revenue moving forward. The council learned last night that first quarter sales tax revenue will likely be on track compared to past years, but any of that gain will likely be lost due to the economic shutdown that began near the middle of March. The first quarter sales tax revenue will be known by the end of this month or early May.
Mayor Sundquist said unless the federal or state governments provides additional aid to the city because of the pandemic, city officials might have to consider taken steps to close any budget gaps, which could include layoffs, although he added that isn’t something he will pursue if he can help it.