Director of Finance Chris Minick provides an update on where the City budget stands in the midst of the COVID-19 pandemic
The COVID-19 public health crisis and subsequent mitigations have greatly impacted many sectors of the economy nationwide. The City budget has been impacted as well.
We Anticipated COVID-19’s Economic Impact and Cut Our Budget
Early on in the pandemic, in June 2020, the City cut its budget by $2.4 million. This was in response to projected revenue losses to our General Fund resulting from statewide COVID-19 mitigations. Today, we are on track to end our fiscal year on April 30, 2021, with a loss of approximately $2.5 million to General Fund revenues. Our proactive approach to anticipating the loss in revenue and matching it with appropriate budget cuts has kept City finances stable throughout this national public health crisis.
What is the General Fund?
The General Fund is the main operating fund of the City. It funds core city services, including police and fire, public works, community development, and general City government. Property and sales taxes are the two main revenue sources for the General Fund. Hotel, liquor, and other taxes, as well as fees also contribute.
Revenue Contributing to the General Fund / What the General Fund Pays For
What’s Not Included in the General Fund
Electric, water, and sewer services are not supported through the General Fund. Each of those utilities is a separate fund, paid by usage fees.
Where Revenue is Down
Property tax revenues have seen little to no impact. Similarly, sales tax is down only slightly, at about 5%.
However, hotel taxes have been severely impacted and are down 82% compared to previous “non-COVID” years. This reduction is significant because several civic groups, such as the St. Charles Business Alliance, the St. Charles History Museum, the Visitor’s Cultural Commission, and the Pride of the Fox Festival Committee receive funding from hotel taxes.
Unbudgeted Revenue Received
There is some good news. The City applied for federal crisis funding and received $1.93M in one-time relief assistance through the CARES Act. The City also has applied for another $30,000 (approx.) from FEMA as reimbursement for COVID-19 PPE supplies we purchased.
In addition, we have started to see proceeds from the municipal recreational cannabis tax, which went into effect July 1, 2020.
COVID Assistance for Residents and Businesses
Throughout the pandemic, we also worked to provide assistance for our residents and businesses. We halted utility disconnections and late fees to help residents (and businesses) struggling to pay their utility bill. And we launched a payment plan program to help residents get their utility bills up-to-date.
We also revised the rules and waived permit fees for outdoor dining, and refunded late-night liquor permit fees for businesses that were closed for COVID-19 mitigations.
For more information on City finances, visit the Finance page of the City website.