Mayor reviews COVID-19 impact on city revenues
Despite the COVID-19 pandemic temporarily closing some Homewood businesses and affecting the daily lives of many residents, the city still had some things to celebrate when reviewing the fiscal 2020 highlights.
The city completed the fiscal year with a slight revenue surplus, Homewood Mayor Patrick McClusky said during his Jan. 19 state-of-the-city address. Throughout the pandemic, the city did not have to access the $11.4 million Economic Uncertainty Fund, which the mayor and city councilors often refer to as the “rainy day fund.”
The General Fund has a fund balance surplus of approximately $27 million. The city spends approximately $150,000 per day to fund its general operations, McClusky said, so the city has about 180 days of operations available in case of a catastrophic event.
“We will be carefully monitoring the expenditures to keep from accessing these funds in our cash reserves, which could quickly be depleted based on the numbers you see in front of us,” McClusky said.
He said the following city revenues were impacted by the pandemic:
- Sales tax revenue was down 4.6%.
- Lodging tax revenue was down 30%.
- Gasoline tax revenue was down 21%.
- Business license revenue was down 5%.
- Building permit revenue was down 28%.
- Parks and recreation revenue was down 66%.
- Library revenue was down 61%.
However, some categories are already looking up in the first quarter of fiscal 2021. When comparing the months of October through December of 2020 to the same months in 2019 (pre-pandemic), sales tax revenue was up by 7%. Liquor and wine taxes were up 14% and 13%, respectively, but these are small revenue items, McClusky said.
The city received more than $1.1 million in federal CARES Act money. More than $860,000 of this money went to the general fund to pay for coronavirus-related expenses and payroll.
The city was able to pay $370,000 in employee bonuses in fiscal 2020.
“Thank you to all of our city employees for the remarkable job that you have done over the course of this last year,” McClusky said. “Homewood has continued to be a place that we are all proud of, and I can say with 100% certainty that it’s because of all the hard work and care that each one of you puts into your duties serving this city we call home.
“I have nothing but best wishes to our citizens and our businesses in 2021. Thank you very much, and here’s to a more prosperous year.”