SYCAMORE - The City of Sycamore's budget for 2020-2021, which goes into effect May 1, is balanced, though that will likely change as the economic crisis caused by the coronavirus pandemic continues.
The FY2020-2021 budget includes a $17.7 million general expenditure fund, an equal $17.7 million in general fund revenues, and a reserve balance of $6.4 million, which could help offset losses expected in sales tax revenue among other areas, said City Manager Brian Gregory Monday.
"We understand that COVID-19 will have an impact on that budget," Gregory said. "We'll assess the impact of the emergency and what that means as we go along and make any changes that may be necessary via budget amendments throughout the year."
At Gregory's recommendation, the Sycamore City Council reviewed the FY2020-2021 budget on first reading only Monday, as the council met for the very first time in a Zoom meeting conference call, to practice social distancing in accordance with Gov. J.B. Pritzker's executive order, which also amends the Open Meetings Act during the viral pandemic to allow for unconventional meetings.
"This was an adventure," said Mayor Curt Lang before logging off.
First Ward Alderman Josh Huseman asked Gregory what specific areas he expected the city's budget to feel the most burden as stay-at-home orders extend dine-in closures locally, schools remain on lockdown, and local economies stagger under the weight of the growing number of COVID-19 cases in the state.
"In addition to the Restaurant and Bar tax, what might be some of the line items, income tax at the state level with unemployment, what might that effect be?" Huseman asked.
Gregory said about 50% of the city's budget is reliant upon sales and use taxes, including income tax, Restaurant and Bar tax, and general merchandise tax applied to goods and services (not including food and transportation).
"The general retail stores are unable to operate at this time so those taxes that would be collected, which go into the general, street maintenance and capital funds [would be impacted]," Gregory said. "We've worked very hard to prepare a solid reserve position knowing that we are somewhat susceptible to the waves in the sales tax fluctuations."
Gregory said new hires planned in the city may also need to be deferred in order to cut costs if necessary.
"I think financially right now, it's hard to say what the impact may be," Gregory said. "But we're trying to be a partner in this with our businesses and our residents who are feeling the impacts as well."
The city has also made changes to liquor licenses and other taxes in an effort to provide relief to struggling businesses, including auto renewing local liquor licenses May 1, so the fee is not due until Aug. 1.
They've also extended payments on Restaurant & Bar, Hotel/Motel, and local gas taxes as well as payments and penalties for water bills and parking tickets until June 30, Gregory said.
The council will vote whether to approve the final budget draft at their next meeting, via Zoom, April 20.