Park City projects $3.9 million budget shortfall as ‘economic crisis’ continues
The Park City manager on Thursday evening indicated the financial impacts of the spread of the novel coronavirus could force the municipal government to reduce personnel costs in some fashion.
City Manager Matt Dias spoke during an important Park City Council meeting as the elected officials were presented with a detailed report regarding the municipal budget. Officials project a $3.9 million revenue shortfall in the current fiscal year of 2020, which ends on June 30. City Hall intends to cover the shortfall in the current fiscal year through a combination of delaying or deferring capital projects, reducing operating expenditures and tapping a portion of emergency reserves.
The spread of the disease and the subsequent shutdown of the mountain resorts and numerous other businesses in Park City occurred toward the end of the ski season, meaning much of the anticipated municipal revenues for the current fiscal year had already been amassed. Still, sales taxes, an important revenue stream, are especially projected to drop.
“There is a lot of pain through these reductions. There are managers and employees that are doing everything they can to maintain service levels for the public and just doing more with less,” Dias said in his comments to Mayor Andy Beerman and the City Council.
There is continuing concern, though, that the financial impacts will stretch into the next fiscal year, starting on July 1. The summer-tourism season has already been impacted with the cancellation of the Tour of Utah bicycling race, one of the largest special events of the warm-weather months.
“In terms of the next fiscal year, that is going to be really, really painful if this continues,” Dias acknowledged in his comments.
Dias said staffers will work toward crafting a sound financial plan and said other communities will need to layoff police officers, firefighters and teachers as core services are cut. He said the plan for Park City will support core commitments and community services.
Dias, though, also noted the possibility of reductions in personnel costs. He did not provide details, though.
“I think eventually everything’s on the table, so I can’t commit to no furloughs, or no RIFs, no layoffs,” Dias said, using an acronym for the term reductions in force.
The discussion on Thursday was seen as a precursor to the upcoming budget talks that are scheduled to launch later in the spring. It is likely the discussions will be the most difficult since the worst of the recession a decade ago.
The elected officials on Thursday signaled their support for the staff-level plans to cover the projected shortfall in the current fiscal year, but the talks about the budget for the next fiscal year will almost certainly be more complex than others in recent years as officials consider the unknowns of the long-term impacts of the coronavirus on tourism and tourism-related industries. A brief assessment of the 2021 fiscal year prepared by staffers in anticipation of the Thursday meeting indicated revenues from sales taxes “are difficult to predict” and “budgeting during a time of fiscal ambiguity requires caution.”
It appears the mayor and City Council will regularly discuss the financial impacts in coming months in formal meetings like the one on Thursday as well as less formal settings like online roundtables and Virtual Coffee with Council events.
Officials are starting to address the financial impacts alongside the continuing public health efforts. A task force has been seated to discuss the broad topic of economic resiliency, as an example.
“Well, as if things aren’t complicated enough, in the middle of our health crisis, we have a bit of an economic crisis, which the two are tightly tied together,” Beerman said at the meeting on Thursday.
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Sales-tax collections in Park City in July beat City Hall projections by a wide margin, providing a key data point that illustrates a nascent economic comeback of sorts from the spring business shutdowns.