City officials in Blue Springs in Grain Valley say they know the pandemic will affect their municipal budgets in some way, but they have time to gauge how much and how they can respond to it.
Various restrictions in the name of the public health have severely hampered sales tax revenues – a key for cities – and will likely continue to do so in the near future, but the timing of a city’s budget cycle versus the restrictions can also play a role in how a city responds.
Independence’s City Council on Monday approved a $25 million line of credit for the city’s general fund from its electric and water utility reserve funds to shore up any last-minute holes with the current fiscal year, which ends June 30, and avoid drastic cuts in the next budget.
Blue Springs’ budget cycle mirrors the federal one – from October through the following September – while Grain Valley’s cycle mirrors the calendar year.
“They don’t have the opportunity like we’re going to have to observe and see a trend,” Blue Springs City Manager Eric Johnson said of Independence. “My first six months, October through March, were right about on target. We know April, May and June will tell us the story, but we are anticipating a sharp decline in virtually all our revenue categories.”
“It’s the timing. The timing works to our advantage and gives an opportunity to plan.”
Johnson said Blue Springs has frozen non-essential purchases and travel and has a temporary hiring freeze, but furloughs are not in the works.
“First responder, that’s our priority right now,” Johnson said. “We are working really, really hard to preserve the integrity of the employees in our organization.”
Blue Springs’ general fund balance is required to stay at or above 30 percent of operating expenditures (which were budgeted for more than $78 million this year) for emergency reserve and budget stabilization.
Grain Valley also has a healthy reserve fund if needed, Deputy City Administrator Theresa Osenbaugh said, with reserves at least 40 percent of the $15.3 budgeted expenditures.
“We’re always doing our best to be fiscally responsible, and we’re being extra cautious at this time,” she said.
Grain Valley doesn’t have as large a retail base to rely on for revenue, Osenbaugh said, and some places like Price Chopper are still doing well during the pandemic.
“We’re cautiously optimistic,” she said. “We know we’ll take a hit in some fashion, but it will not be as much as some other places.
“We’ve done a lot over the last several years, budgeting conservatively. The longer this goes on, the harder it will be for all cities to recover.”
Whatever isn’t closed for public health precautions, Blue Springs employees have been keeping operations going as normal even under different circumstances, Johnson said.
“We’ve been through other downturns before, but we’re still keeping the shop open,” he said. “We’re working with builders and others who want to do business in the community. “Everything we’re doing right now is new,” he said of employees, “but they’re keeping the lights on and staying positive.”