Pandemic hitting city, county budgets
As the city and county are reopening along the governor’s phased reopening guidelines, limitations continue and there are financial impacts for the local governments.
The state received $1.25 billion of federal funding through the $150 billion Coronavirus Aid, Relief and Economic Security, CARES, Act.
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Gov. Steve Bullock convened a Coronavirus Relief Advisory Council that last week presented its recommendations to the governor on how the funding should be used.
The focus of those recommendations was on providing an immediate safety net; business stabilization; tourism, hospitality and entertainment jumpstart, according to the council’s report.
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It’s unclear how much of the CARES funding will come to local governments or what resources will be available to help local government recoup costs related to the COVID-19 pandemic.
The city, county, Great Falls Development Authority, Great Falls Area Chamber of Commerce and Great Falls Montana Tourism submitted comments to the governor’s council regarding the financial impact and suggestions for the state’s allocation of CARES funds.
During the May 5 City Commission meeting, City Manager Greg Doyon said that the city’s fund balance was running around 15 percent in the second quarter and now it’s down to 8 percent. Doyon said it’s not unusual based on the timing of when tax revenues come in to local governments, but it’s something to watch with the pandemic impact and the ongoing Calumet tax appeal.
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In their comments to the governor’s council, to the city and county, if current market conditions are used in response to tax protests filed long before the pandemic and left unresolved so far, impacts on the county and city revenues will be significant.
In the Calumet appeal, the refining company has asserted that the property value assigned by the Department of Revenue in 2017 of $537.3 million is overstated by about $300 million.
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The case went through the county appeal board and both the DOR and Calumet appealed the board’s decision to the state level.
Calumet has paid its taxes under protest in 2017, 2018 and 2019.
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According to the city, COVID-19 has resulted in $582,133 in additional expenses, large chunks to health insurance increase due to the pandemic, and expenses due to the Family First Coronavirus Recovery Act, as well as smaller chunks for personal protective equipment and cleaning supplies and technology costs.
The city also indicated that so far, the pandemic has resulted in $520,753 in lost revenue, from building, electrical and plumbing permits; parking; Park and Rec facilities fees; deferred prosecutions; fewer animal licenses; and canceled Civic Center events.
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The county comments to the governor’s council didn’t include figures but indicated additional costs for staff overtime; adding part-time nurses at the health department for contact tracing; replacing at-risk volunteers with county staff for the Meals on Wheels program; county IT support for district court and the county attorney’s office; fully compensating non-working employees to lessen impact of COVID-19 and compensating nonproductive hours for employees.
The county also has additional cost for supplies and equipment including personal protective equipment for first responders; operating the emergency operations center; cleaning supplies for district court; retrofitting teller areas with protective shields; food and supplies for increased Meals on Wheels demand and delivery changes; increased mileage on county vehicles due to one-employee-per-vehicle restriction.
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Other county costs for COVID-19 include the purchase and installation of 18 camera/microphone units and software licenses for district court; 30 additional laptop computers for remote work; 41 additional computer camera/microphone devices for online county meetings; printing costs for documents that attorneys are filing by email rather than in-person; among other costs.
Going into the budget process for the fiscal year that begins July 1, both the city and county have indicated concern over lower tax revenue due to delinquent and protested taxes and both will likely have budgets without major allocations for new staff or improvements.
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At the city, Doyon has said in multiple public meetings that he’s starting with a baseline budget and asked department heads to prioritize needs.
Several department heads have said that they’ve been told there will be no funding for above and beyond requests this year. In recent years, those request have ranged from new police and fire positions, other additional staff, equipment and training among other needs.
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Doyon said during the May 5 meeting that most of the usual at-risk funds remain, including golf, which owes the general fund a substantial amount.
The good news, he said, is that CourseCo provided a payment of about $80,000 from last season, which is “very positive for the golf courses.”
CourseCo is working to follow health protocols so that the two municipal courses can remain open and generate some revenue.
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The city’s indoor pool fund was looking good until COVID-19 shut down operations, Doyon said. Operations at the Mustang Pool at the Montana School for the Deaf and Blind had begun to normalize but that’s “on its head now,” he said.
Staff is looking at the updated guidance from the governor’s office regarding pools to develop operating plans for the summer.
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Doyon said he expects a budget impact for the fiscal year that starts July 1, but “more noticeable” impact for year two and three due to the way the state calculates entitlement funding, the inflationary factor and newly taxable property.
The departments that have been dependent on general fund support are going “to have a challenging couple of budget cycles” as are those that rely on funding from events and programming due to pandemic related cancellations and restrictions.