BARRE — City councilors were told Tuesday night the coronavirus pandemic is in the process of blowing a $400,000 hole in municipal revenue for the fiscal year that ends July 1.
City Manager Steve Mackenzie’s “hold your breath” pronouncement came on a night when councilors met remotely for the second straight week – this time by video conference.
Though Mackenzie didn’t delve into the details with respect to the now-anticipated revenue shortfall Tuesday night, Finance Director Dawn Monahan filled in some of the bigger blanks with round numbers during a telephone interview on Wednesday.
According to Monahan, $400,000 is an upper end estimate and some of that is self-inflicted, large chunks can be traced to the life-altering and still-evolving response to the disease caused by the new coronavirus.
Monahan said she is now anticipating a $100,000 reduction in fees, fines, penalties and interest – a sliver of which can be traced to week-old decisions the council ratified Tuesday night. That includes roughly $3,000 tied to the decision to suspend interest due on delinquent tax accounts through April 15 and about $700 linked to a one month extension for licensing dogs. It does not include $6,000 in revenue the city expects to lose because of its approval of a one-month waiver of penalty and interest associated with water and sewer that are due next Tuesday, as well as other delinquent accounts.
Meanwhile, Monahan said she is bracing for an $80,000 spike in delinquent taxes due to the economic impacts of the coronavirus crisis.
Monahan stressed her estimates are conservative and assume the school district doesn’t pay a portion of the agreed upon amount for school resource officers who aren’t working in schools that were closed last week and will remain that way at least through April 6. That money coupled what appears to be a drop in ambulance revenue due to transports that aren’t happening because hospitals are trying to hospital beds open, translates into a projected $70,000 shortfall in emergency services revenue.
Monahan said the Barre Civic Center is already well on its way to generating $50,000 less revenue than budgeted for due to a spate of cancellations. Her estimate assumes the facility could again be available in May and June. If it isn’t shortfall will be more pronounced.
Finally, Monahan said cemetery revenue appears to be off by about $53,000 though most of that is due to an overly rosy estimate and can’t be pinned on the pandemic. That figure could swell if some funerals that are starting to be postponed are pushed into the next fiscal year.
Councilors didn’t get that level of detail Tuesday night, but likely will next week. Given the financial implications of the coronavirus crisis they have requested monthly updates on budget status and Mackenzie promised the first next Tuesday.
Before the pandemic Monahan and Mackenzie were projecting a $70,000 deficit.
Though Mackenzie hasn’t frozen spending, he told councilors he is now requiring purchase orders for any item over $500.
Mackenzie also updated councilors on ongoing negotiations with the apparent low bidder for a pool project that was far more expensive than the city’s consultant estimated.
Thanks to a mix of voter-approved bond money and previously awarded grants, Mackenzie said the city has enough money to refurbish the 70-year-old swimming pool, but would need to find an extra $200,000 to incorporate plans for a beach entry that was once part of the core project.
“Everybody is prepared to move full speed ahead with the project,” he explained. “It’s just a question of which project is it?”
Councilor Michael Boutin suggested until the current crisis passes it might not be prudent to invest in a recreational facility designed to serve large groups of people.
“I’m wondering should we be pumping the brakes on this?” he asked, adding: “Who knows what life is going to look like after this?”
It was a sobering question that prompted Mayor Lucas Herring to remind Boutin the pool is slated to be under construction this summer and wouldn’t be ready for public use until next year. He favored pressing ahead with the pool project and tapping a $286,000 contingency contained in a recently approved $1.7 million infrastructure bond to allow the beach entry to be part of the project.
Mackenzie said he was optimistic he could negotiate a $50,000 reduction in the bid price and using a portion of the contingency was a viable option. With almost all of the necessary funding in place, he said, postponing the project wouldn’t be wise unless the council was inclined to abandon it completely.
“It’s never going to get any cheaper,” he said.
Mackenzie said he hoped to conclude negotiations with the contractor by Friday, brief the council next Tuesday, and remained optimistic a contract could be awarded next month.