HomeMy WebLinkAboutItem 8.1 - 3176 Impact of COVID-19 on City Finances (2)
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STAFF REPORT
CITY COUNCIL
DATE: April 7, 2020
TO: Honorable Mayor and City Councilmembers
FROM:
Linda Smith, City Manager
SUBJECT:
Update from City Manager on Impact of COVID-19 including City Finances
Prepared by: Colleen Tribby, Assistant City Manager
EXECUTIVE SUMMARY:
The City Council will receive a verbal update from the City Manager on the City's
response to COVID-19 and will receive an overview of the currently anticipated impacts
of the COVID-19 pandemic on the City's General Fund in the current year and in the
two-year budget.
STAFF RECOMMENDATION:
Receive the report.
FINANCIAL IMPACT:
The current estimate of the impact of the COVID -19 pandemic on the City’s finances is
a reduction to actual General Fund net revenues by approximately $2.7 in the current
fiscal year, and a reduction in the General Fund net revenue budget by approximately
$6.5 million and $5.4 million for Fiscal Years 2020-21 and 2021-22 respectively. The
two-year budget will be presented to the City Council for adoption in May or June.
DESCRIPTION:
The Fiscal Years 2020-21 and 2021-22 preliminary budget was presented to the City
Council at the Strategic Planning meeting on March 4, 2020. Since the presentation,
the COVID-19 pandemic has had a significant impact on the national and local
economies, with indicators showing signs of a coming recession.
The City of Dublin is already experiencing operational impacts in the current year due to
the shelter in place order issued by Alameda County, particularly r elated to the closing
of facilities and the suspension of certain programs. Staff expects these impacts to
continue for the foreseeable future, in addition to losses in revenues that are tied to the
larger economy, including taxes and investment income.
The result is an estimated $2.7 million net loss in the current year across several
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revenue categories, including recreation services. By comparison, the City lost a
combined $4.8 million over Fiscal Years 2008-09 and 2009-10 in the categories of
Property Tax, Sales Tax, and Interest Income.
In addition, the preliminary budgets for Fiscal Years 2020-21 and 2021-22 will be
reduced by $6.5 million and $5.4 million, respectively.
Estimated losses (actual and budgetary) are summarized as follows:
Revenue Type Change to FY
19-20 Actual
Change to FY
20-21 Budget
Change to FY
21-22 Budget
Property Taxes ($1,394,000) ($556,000)
Sales Taxes ($1,845,000) ($3,457,950) ($3,355,099)
Interest ($250,000) ($1,095,985) ($1,490,985)
Net Recreation Revenue* ($587,498) ($567,146)
Total ($2,682,498) ($6,515,081) ($5,402,084)
* Net of expenditures adjusted for the decrease in activity
This information is meant to provide a brief primer to the City Council on the current
situation with Staff’s best estimate of currently anticipated impacts. There will additional
impacts discussed and included in the May budget document; for example, with the
restrictions contained in the County’s new order, construction and permitting activities
and the forecast of associated revenues and costs will need to be revised. An update to
the 10-Year Forecast will also be included.
STRATEGIC PLAN INITIATIVE:
Strategy #1: Assure the City's long-term financial sustainability;
Strategic Objective A: Maintain strong conservative fiscal policies.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
None.