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Council Committee Hears More Specifics On Possible Shortfalls

22 Apr , 2020  

By: 1812Blockhouse Staff

At its last meeting, Mansfield City Council’s Finance Committee, and City Councilperson Jean Taddie, asked for additional specifics on how an estimated 20% decrease in revenue would impact finances for the City.

At that time, it was suggested by City Finance Director Linn Steward that to deal with the difference between revenue and expenditures, that a combination of budget cuts and use of the Budget Stabilization Fund would likely be necessary.

In a virtual meeting held on Tuesday evening, April 21, the Finance Committee met again and Setward led members on a review of the City’s budget areas and the likely impact of such a reduction on each.

Factors shared by Steward included the following:

Income tax — During the first two weeks of April, collections are down 18% year-to-year. The delay in filing deadline will also result in delayed payments, and the Tax Department is unable to deliver summons to delinquent filers and payers. In 2021, the tax base may be decreased because of closed or reduced-sized businesses.

General Fund — Reductions in court fines/costs, income tax penalties, and utility collection late fees

Street Maintenance and Repair Fund — Gas tax could be greater than 20%, and a lag in collection time makes things hard to predict. Motor vehicle registrations are also delayed.

Permissive Sales Tax — General Fund will have to pay of jail waiver ($300000) to the County

Street Lighting Fund — General Fund will have to pay any shortfall in income tax collections

Demolitions — Likely none for the remainder of the year

Safety Services PRIDE Tax — 20% reduction is approximately $400000, but this could be offset by Safety Services’ share of Workers Comp rebate.

Street Resurfacing — Action taken to reduce pending contracts

Water Fund — A delay in water meter installation will result in delay of revenue. The estimated shortfall in this fund would be as high as $1.7 million.

The following funds would suggest the following approaches, Steward indicated:

  • Budget cuts and/or Budget Stabilization Fund — General Fund, Safety Services
  • Budget cuts — Street Construction, Permissive Sales Tax, Demolition, Water
  • Possible future cuts — State Highways, Parks and Recreation, Street Resurfacing
  • Transfer from General Fund — Street Lighting

A handout shared with Committee members that show these items  can be seen below. Click on the thumbnail for a largere image.

Steward discussed use of the Budget Stabilization Fund in more detail. That use will give the Administration and Council time to set up a long-term plan, Steward stated. Other cities have already been seeing layoffs, she added. To use the Fund, there must be a plan to replenish what is taken; the current amount envisioned would take 3 ½ years to accomplish that.

Other ideas discussed included having the Law Department to renegotiate, at least on a temporary basis, the fee for prisoner housing. Taddie asked about the 20% assumption, and Steward shared that a clearer picture of revenues and action would not be available until the end of May with the closing of May’s financial report.

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