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HomeMy WebLinkAbout_Fiscal Impacts of COVID-19 Photo Courtesy of VisitOldTownSealBeach.com FISCAL IMPACTS OF COVIDCITY OF SEAL BEACH-19 OVERVIEW •Economic Impacts of COVIDthe budget development process, challenges and timelinefund balance for the General Fund-19 •Budgetary Impacts for FY 2020-21 including an update on •Budgetary Impacts for FY 2019-20 and projected ending 0.00%CaliforniaU.S. UnemploymentApr-20Mar-20Feb-20Jan-2025.00%20.00%15.00%10.00%5.00% 14.70%20.00% 33.5 million initial jobless claims as of 5/7/20 RateUnemployment Rate UNEMPLOYMENT •Consultations with experts and other municipalitiesFY 2019when income levels are expected to come back to pre-20 and FY 2020-21-COVID-19 levels ••••Assumes statewide stay at home order are lifted by June 1Revenue estimates from industry experts have been revised a number of times for both Uncertainty around people’s habits and spending patterns, which make it hard to predict Assumes the virus runs its course in US by October 1 CHALLENGES ASSESSING ECONOMIC IMPACTS FOR SEAL BEACH Swoosh”or “Nike Shape Tick- Big V POSSIBLE AND LIKELY RECOVERY MODEL VUWLv Refunds of classPersonnel costsSanitationSafeguarding propertyTechnologySuppliesPPE (Masks,Costs5/8/2020$ 260,250$ 41,400TOTAL182,200as of 16,400 9,350 3,2005,450 2,250 costsneedsGloves)fees eligible costs beyond what is allowed by FEMA. Two possible sources for reimbursementcosts.Supervisors to cover the remaining 25% Executive Officer to request the Board of but County is. Cities are asking County not covered by FEMA. •If approved, they may consider additional EXPENSE IMPACTS FY 2019-20 ••FEMA CARES Act Funding –will reimburse –City is not eligible 75% of eligible Sales TaxCharges for ServiceFines and ForfeituresLicenses and PermitsTOTProperty Tax$ 1,785,000$ Moderate$ 2,688,000ImpactImpactSevere $ 850,000TOTAL415,000 880,000 300,000 620,000 550,000 150,000 300,000 98,000 75,000 70,000 75,000 45,000 45,000 ESTIMATED REVENUE IMPACTS FY 2019-20 NetUse of Budgeted SurplusRevenue Losses$ 2,300,000 $ 843,800ScenarioExpenditure Savings(1,456,200)Impacts ESTIMATED REVENUE IMPACTS FY 2019-20 more information comes out that requires us to go back to the drawing board. •Revenues have been rewhen income levels are expected to come back to pre-forecasted four times since the budget process started. -COVID-19 levels. •Assumes statewide stay at home order are lifted by June 1 •Assumes the virus runs its course in US by October 1 FY 2020-21 BUDGET PREVIEW ••Currently, we are looking at a 2%Currently evaluating options for budget balancing. Each time we think we have balanced, -3% reduction in overall revenues in the General Fund. •Uncertainty around people’s habits and spending patterns, which make it hard to predict •Currently evaluating options for budget balancing. Each time we think we have balanced, more information comes out that requires us to go back to the drawing board. ••••••••Reduce budgets in accounts where spending wasn’t occurringReduction in services to communityPersonnel impacts (hiring freeze, furloughs, layoffs, salary reductions, benefit suspensions)Defer additional payment to pay down OPEB liabilityPay for construction management costs using CDBG funds, currently paid for by General Fund.Reduce supplies, training, etc. Evaluate discretionary costs and see what can be deferredRe-evaluate use of restricted funding sources to make sure we maximize them before General Fund •••Reduce overtimeUse of reservesDefer replacement of vehicles •••Tier 1Tier 3Tier 2 •Taking a tiered approach to balancing: FY 2020-21 BUDGET PREVIEW Fund and authorized personnel •Summary version of preliminary budget will be issued on the proposed budget ••Includes all revenue and expenditure schedules, including new ones relating to General Includes new sections on the budget process and financial and budget policies •Will be available online to the public no less than one week before study session FY 2020-21 BUDGET PREVIEW ••Budget document getting a new look that is easier to readPlanning for two opportunities for Council and the Community to provide feedback QUESTIONS