Press "Enter" to skip to content

How has COVID-19 Impacted the City of Auburn Budget?

Advertisement

Press ReleasePresenting at Monday evening’s council study session, Finance Director Jamie Thomas briefed Mayor Backus and the Council on the state of the City’s budget and the major impacts that COVID-19 has had on overall revenue.

Thomas estimated that the shortfall to the City’s revenue as a result of pandemic will fall between eight to 12 percent, or an estimated $6-$9 million through the end of 2020.

Advertisement

“We are working with this base model number assuming that the stay home order lasts two months and that there will be slow economic recovery through Q3 and Q4,” Thomas said.

The bulk of the anticipated deficit comes from the loss of sales tax revenue, estimated to be between $3.5 and $5.1 million short of expectations, due primarily to the closure of retail businesses during the Stay Home, Stay Healthy order. An additional $450,000 in revenue will also be lost in 2020 following the governor’s veto of continued Streamlined Sales Tax Mitigation funding.

An additional $1.2 – $1.7 million in lost revenue is estimated for the year from service fees associated with parks, cultural programming and police, as well as $500,000 – $800,000 in reduced development activity, $150,000 – $650,000 in Motor Vehicle Fuel taxes and $180,000 – $300,000 in other revenue sectors including gambling taxes and business license renewals.

To address these shortfalls, City leadership has taken immediate steps to fill the anticipated revenue gaps through a combination of one-time revenue draws from other fund areas and interest earnings, as well as expenditure cuts across all departments.

Advertisement

Emergency reductions to the City budget include program cuts and the delay of critical programs through 2020, as well as the elimination of discretionary spending items such as trainings, travel and some contracts. Total cuts are still being finalized, but an estimated $3.5 million will be reduced from General Fund expenditures.

City staff have been issued mandatory furlough hours and City contributions to some benefit plans have been halted, equaling roughly five percent of employees total compensation packages.

Additionally, seasonal and temporary employee positions have been eliminated and a non-essential hiring freeze has been put into place. Voluntary separation, or early retirement, from the City, as well as staff reorganizations measures have also been taken.

Advertisement

“We are hopeful that cities may see some assistance at the state and federal level to help us as we navigate through these uncertain times, but until that is an assurance, we must take steps now to protect the economic stability of our city for our businesses and residents,” said Mayor Nancy Backus.

Budget adjustments, including the one-time revenue generators and program and staff adaptations, are estimated to generate approximately $6 million in funds to help meet 2020 revenue shortfalls, though further changes may be necessary as the situation evolves.


The above is a release from the City of Auburn.  The Auburn Examiner has viewed the Study Session presentation, but has not independently confirmed the full contents of this release.

Advertisement
Advertisement

One Comment

  1. virginia haugen virginia haugen December 8, 2020

    The city of Auburn was in trouble before Corona virus became an issue. The city council continued to approve unnecessary expenditures with out regard for the fiscal health of it’s government. The hype and drama with regard to covid19 is destroying the lively hood of many businesses in Auburn while our mayor and city council continue to be to paid.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

WP2Social Auto Publish Powered By : XYZScripts.com