While there is no way to completely forecast the economic impact COVID-19 will have on the Town of Windsor, municipal staff and Town Board recently took a close look at the 2020 operating budget to plan for a financial worst-case-scenario. The Town Board has authorized $1.4M in reductions to operating expenses (2.6% of operating budget) and is postponing $11.3M in capital projects (31.7% of capital budget) for 2020.
Proposed adjustments to the 2020 Budget were presented to the Town Board on March 30 during the Town Board work session. During the meeting staff presented reduced revenue expectations and provided suggested 2020 operating budget amendments. Staff is provisionally anticipating that the town will receive $19.2 million less in revenue than presented in the 2020 Budget. To make up for the possible shortfall, total spending will be reduced by $14.2 million and the remaining $5 million will be made up from budgeted fund surpluses in 2020 and from fund surpluses in the 2019 Budget. According to Director of Finance Dean Moyer, “Because the town has consistently managed its finances in a prudent manner, fund reserve balances have the capacity to withstand a decline in anticipated revenues in 2020.”
Additionally, Town departments have been instructed to forego any non-essential spending. The town issued a temporary hiring freeze after Governor Jared Polis released the state-wide stay-at-home order. As part of the freeze, vacant full-time positions will not be filled. This does not apply to public safety personnel. Hiring for part-time and seasonal positions will proceed as deemed necessary for town operations.
Sales tax revenue will be impacted in a few ways. Most notably because several small businesses are temporarily unable to operate or are required to modify how they serve customers, there is an expected decrease in sales tax collection. In an effort to support local businesses, the town recently offered qualifying restaurants, breweries and coffee houses an option to defer sales taxes until later this year.
Staff is also considering a possible decrease in revenue from development fees. There was little sign of development slowing down in March but that has changed in April, according to Planning Director Scott Ballstadt. Additionally, the Town may potentially see a reduction in royalties from the oil and gas industry. In more recent years, oil and gas revenues have been used to offset extra, non-essential road projects. With decreased oil and gas revenue projections, non-essential projects may be delayed.
Proceeds from other revenue sources, such as recreational programming, will be down as several classes and programs had to be cancelled or rescheduled per the stay-at-home order.
Depending on developments during the next 90 days, the town may have to revisit its budget and make additional adjustments, but for now, according to Town Manager, Shane Hale, “Our goal is to continue to give our residents the quality of life they know and enjoy.”
For access to past meeting packets, agendas and footage from town board meetings, visit windsorgov.com/meetingsondemand.