City Finances: Update, 11.30.2020
Summary: the state of City finances is unexpectedly strong as we approach year-end.
When covid-19 first broke on to the scene last March, projections for city finances 2020 took a somewhat scary nosedive. A 10% drop in income tax revenues was forecasted (and who knew what the bottom really was?). And, since income tax revenues account for ≈ 75% of city revenue, this projected downturn cast a big shadow of uncertainty on a wide range of plans and programs. Belt-tightening was obviously called for—a couple of painful notches for starters—but would that be enough?
Happily, as we approach year-end, we can now safely say that not only has the worst been averted, but that we will enter 2021 in a decidedly strong financial position. This positive outcome is a result of 1) better-than-expected income tax revenue, 2) highly effective cost management by city staff, and 3) one-time receipt of state/federal funds.
Given remaining uncertainties, even as I look forward with great optimism to a post-covid 2021, I would suggest that continued financial prudence and a spirit of gratitude are most appropriate at present. Here are a few highlights of the 11.30.20, Year to Date (YTD) financial report as presented at last Monday’s Council meeting:
- YTD income tax Revenues are just 0.17% below budget ($19,525,556 actual vs. $19,558,186 budgeted), not the 10% projected back in April.
- Total General Fund Expenses were reduced by a whopping $5.1 million from budget, a 17% reduction ($25.6 million actual vs. $30.7 million budgeted*). These savings reflect the furloughing of part-time workers, unfilled staff positions, reduced programming, and deferral of various maintenance expenditures.
- The result? Our General Fund Balance will in all likelihood actually increase for the year, and will be in the range of $16-17 million at year-end, more than 50% of last year’s expenditures (the upper end of the City’s target).
- Lastly, because of ≈ $1.4 million in CARES Act funds received, the City was able to provide much-needed, direct financial assistance to community groups ($100,000) and small businesses through a ReBoot COVID Relief fund ($300,000). Read about this here: https://worthington.org/1943/COVID-19-Business-Support
The full 11.30.2020 financial report can be viewed here, pages 26-31: https://www.worthington.org/ArchiveCenter/ViewFile/Item/3616)
I’ll be glad to try and answer any questions prompted by this thumbnail sketch post, if you email me at firstname.lastname@example.org
My earlier post (September, 2020) on the city’s finances can be viewed here:
And, if you wish to see how the financial outlook appeared back in April, please go here (pages 48-52): http://www.worthington.org/ArchiveCenter/ViewFile/Item/3393
* The $25.6 million actual figure was derived by adding the Police and Fire expenditures ($432,620 and $796,817, respectively), that had been moved to the CARES Act Fund 222, back in to the GF Expenditures report (where they normally would be located in order to provide comparative information year-to-year), so that the $24,327,002 Total Expenditures figure on the GF Overview report became $25.6 million.