CIRCLEVILLE — Circleville City Council will take a look at several pieces of legislation at their next meeting following recommendations from the city finance committee that will change the 2020 budget in the wake of lost revenue due to COVID-19 and the related shutdowns.
“The purpose of this meeting is addressing the budget reductions related to COVID-19,” Barry Keller, finance committee chair and council member, stated at the top of the meeting. “We have several pieces of legislation, five total, to deal with the loss of revenue.”
Keller said that he’s met several times the topic and the ordinances were the bi-product of those meetings.
“The mayor and myself have been at every meeting and at two of those meetings, we had all of the elected officials in council chambers to discuss the impact of the estimated budget reductions due to loss of revenues and to talk about proposals,” Keller mentioned. “We reviewed the projected revenue losses that were estimated to be over $1 million in various funds throughout the budget.”
Keller said the group that met, which included Auditor Gayle Spangler, Mayor Don McIlory, Council President David Crawford, Municipal Court Judge Elisa Peters, Treasurer Brent Bowers and Law Director Gary Kenworthy, discussed possible ideas to address the loss of revenue.
“The auditor also distributed a proposal that could be cut to all departments by percentage of their budget,” he explained. “That was handed out, as well as a program cuts. That information was emailed to all council members so that they could understand the impact to our budget before tonight’s meeting.”
Keller said based on all the discussions, the five pieces of legislation presented at the meeting were drafted.
The pieces of legislation defer a payment to Pickaway Progress Partnership (P3) until 2021, reallocate funds to pay for safety forces in 2020 in order to make general fund obligations, forego a payment to P3 of matching funds for the Construction of the Robert W. Plaster Southern Gateway Business Development Center, amend the 2020 budget in several funds and finally, request the city’s share of funds from the Coronavirus Relief Distribution Funds.
The bulk of Tuesday’s meeting was spent talking about changes to the safety forces funding. One ordinance shifts some of the required line items from the general fund to the newly created .5 percent safety forces fund from last November’s levy.
“The mayor submitted a list of funds he wanted move from the general fund to the (safety forces .5 percent tax fund), it includes the remainder of the balance of civilian police and a portion of regular police,” Spangler said of one of the legislation.
McIlroy said they made the decision that they would not do any new hiring in 2020, but rather fill existing positions and that money was transferred to reduce the amount in that expense line.
“We moved it from the general fund to (the safety forces fund) to come to some sort of balance to our general fund,” he added. “We’re still going to be hiring to replace (vacancies).”
Spangler confirmed that previously, before that change, the city wouldn’t have the funds in the coffers to make the first payroll of 2021, however, the new balance will be able to cover that.
“This is going to give you a better balance going into 2021,” she explained. “Previously, the balance going in 2021 was $57,000 and this will give a balance of a little over $300,000 to start the new year for 2021 projections.”
Keller, echoing the mayor’s statement, said with the moving of expenses from one fund to another will slow down the hiring of new staff in 2020 beyond 2019 numbers.
“This is all related to COVID, it’s not something we expected and it doesn’t mean we won’t hire those additional people, assuming revenues return, but it will slow down hiring in 2020 with the new monies,” he remarked.
Spangler said the $1 million shortfall isn’t in one fund but is over several funds across the city’s budget.
“We’re estimating in income tax alone, we’ll lose about $585,000,” she said. “There’s probably another $380,000 deferred. As of now, income tax in the general fund is down $233,000, that’s with May paying June. We’ve not seen the big losses yet, which will be June and July.”
(Spangler) has explained to me that we’ve not really seen the huge financial hit yet, that it lags a couple of months behind,” Keller added.
The total proposed reduction in the general fund is about $747,000. Of that, about $454,000 comes from moving expenses related to safety forces from the general fund to the fund created by the income tax levy that was passed last November. The balance comes from pretty much every department across the city, including the tree commission, Municipal Court, Clerk of Courts and tourism to name a few.
“It wasn’t an easy process, but I think working with the auditor, we were able to make the right decisions and I appreciate her help on this,” McIlroy said.
After the meeting, Spangler told The Herald that another piece of legislation with additional cuts would happen, but it would be from different funds such as utilities.
“That ordinance will be another round of reductions, but probably not any of (the funds already addressed),” Spangler explained. “They have a little bit better cash balance, but are still seeing reductions in revenue.
Keller said that like many other governmental entities across the state and nation, revenues are down and the plan they came up with allows them to retain all their employees.
“This plan allows us to get back to the black and not furlough people,” he said. “That was the goal and we were able to do that for our employees.”
The legislation discussed at the meeting will be once again discussed at the July 7 city council meeting and be included for a potential vote at that meeting.