The coronavirus has taken a significant bite out of revenues for the City of Roseburg, which has led to cuts in spending and a steep drop in the amount the city is able to put away in reserve.
“We are being greatly impacted by COVID,” finance director Ron Harker told the City Council Monday as he delivered his quarterly report on city finances. The report covered the last six months of 2020 and focused on that time period compared to the same period in 2019. Harker also used those numbers to project what the fiscal year will likely look like, compared to the previous year.
Some highlights from the report:
- Tax collections, including property taxes, are projected to result in a budget shortfall of $717,336 for the fiscal year.
- Combined revenue collections are projected to result in a budget shortfall of $910,688.
- Collections from licenses, permits and fees are projected to result in a budget shortfall of $220,749.
- Revenues from the gas tax were budgeted to bring in about $3.2 million for the fiscal year, but will likely only produce about half that amount. That means some transportation projects will be postponed.
The bottom line for the city’s general fund: while officials had initially anticipated adding more than $700,000 to reserves this year, that amount will likely be about $50,000.
“While not ideal, given the impacts of the COVID-19 pandemic, this is a good outcome,” the report said.
In response to the pandemic, city departments are spending less this year in an effort to offset a drop in revenue, Harker said. Total projected expenditures in the general fund for the fiscal year are $25 million, which translates to a budgetary savings of just over $1.9 million for the fiscal year, the report said.
“What this means is the departments are very much aware of the constraints the city is experiencing,” Harker said.
However, year-to-date general fund spending is up by nearly $200,000 from the same period last year. That includes increases in the city manager’s office (15%), the library (11%), capital improvements (10.8%) and parks and recreation (9.5%).
The budgets for the police and fire departments remained about the same, and there were small decreases in public works and community development.
There are a couple of bright spots in the budget report.
Revenue from the state on taxes generated from the sale of tobacco, marijuana and liquor is up considerably, resulting in a budget surplus of $144,107. “The increase is partially attributable to vice revenues related to liquor, and marijuana being up as Oregonians are self-medicating through the pandemic,” the budget report said.
Also, revenue from the tax on hotel, motel and other short-term stays increased by 13% in the last three months of 2020, compared to the same period last year. That rebound came on the heels of an 18% decrease in revenue in the summer months.
Harker said the late-year increase in the bed tax may be attributed to victims of the Archie Creek fire staying in hotels and other temporary housing. Renters become exempt from that tax if they stay for more than 45 days, so if the revenue increase is related to fire victims it may not last, Harker said.
“This has really been a unique year, we really don’t know what’s happening,” he said. “We’ll just have to see how it plays out.”
In other budget news, the annual audit of city finances showed no irregularities or problems. The audit, for the fiscal year ending June 30, 2020, was conducted by the Roseburg CPA firm Neuner Davidson & Co.