COVID-19 slowdown creating cashflow crises in communities
Eagle expects 2020 revenue to be off 25%
EAGLE — Shuttering businesses for the coronavirus outbreak will leave Eagle with 25% less money than projected.
The Town Council’s first look at its post-COVID-19 cashflow shows that general fund revenue will fall $1.8 million short of the $7.1 million budgeted for 2020. However, that budget projection from the halcyon days of BC — Before COVID-19.
Eagle’s sales taxes, most towns’ economic lifeblood, is being hammered as businesses hang on.
“Fortunately, the town saw positive increases for the first three months of 2020,” the report said.
Ironically, because people aren’t misbehaving at anywhere near the levels they were last year, even Eagle’s municipal court fines are down 41% or $51.885.
It could be worse, and is in many places. At a mayor/manager meeting Town Manager Brandy Reitter and Mayor Scott Turnipseed learned that some towns are down 50% and more.
What to do about it
As the Town Council sees it, it has two options:
- Use the town’s fund balance to make up the difference after cutting spending, including a hiring and salary freeze, postponing capital projects, and payments to the open space fund.
- Cut spending by the amount by the amount of money they’re short.
The town also took some preemptive action in March when it declared an emergency disaster, which could make it eligible for federal funds.
Like every other community, Eagle has been down this road before. When the Great Recession hit in 2007, the town took an 18% hit over the next three years, through 2010.
The Town Council will talk about it during Tuesday’s online meeting. To be part of the discussion you must register beforehand.
Town Council donating pay
Town Council members are doing their part. The seven-member council voted unanimously to donate their stipends to the town’s general fund to help the town and Eagle’s struggling businesses. That was supposed to sunset on April 24, but the Town Council is extending it to August 1.
Given the current pay — $250 a month for board members and $400 a month for the mayor — it might be largely symbolic, but it’s something board members said they felt they should do.
“It demonstrates good faith,” said Town Councilmember Matt Solomon, who proposed the idea.
Solomon and some other board members could probably use the money.
Solomon is self-employed and up to his eyebrows in canceled contracts as a result of the coronavirus. Board member Andy Jessen launched Bonfire Brewery and during the Town Council’s first online meeting sat alone in his darkened, empty bar.