With many restaurants either shuttered or open at limited capacity, less water is being drawn and paid for in the city. Parking garages and metered spaces are mostly empty and few tickets are being written. Paid parks and Recreation programs have been suspended. Events at the Everett Arena, like cat or gun shows, that bring in cash are off the books.
“In those and dozens of other areas, we are losing revenue,” Concord City Manager Tom Aspell said.
Just like every town and city in the state and cross the country, Concord is dealing with the loss of revenue because of the COVID-19 pandemic, Aspell said.
The losses have come at a time when municipalities are pulling together their budgets for the 2021 fiscal year, which begins in July. Aspell presented Concord’s budget to the City Council Thursday prior to a meeting to discuss it, which will be held virtually Monday night at 5:30 p.m.
That meeting will be a first glimpse at the details of the fiscal impact on the city so far, including what city officials planned for this year, how those plans have been changed by COVID-19 and what they are anticipating for future revenue.
Aspell said he built the budget using $1.5 million in unassigned funds to offset any tax increases.
The budget projects a return to everyday life with restored revenue streams, Aspell wrote the council.
“It is critical to note, however, that this budget, perhaps more than any other I have submitted to City Council in my tenure, is subject to a fair amount of unknowns, particularly the knowledge of the true depth of losses in essential revenue streams such as property taxes, rooms and meals tax, motor vehicle registration,” Aspell said.
Despite the lean times, the city has already been granted $1 million from the federal CARES Act, which will be used to recoup losses in the 2020 budget. The rest of the money will be used to help buoy the 2021 budget. To put that amount of money in perspective, $1 million represents about 1.5 percent of the city’s general fund.
Changing guidelines and regulations at both the state and federal level, as well as keeping on top of assistance programs has forced the city to revise its budget and its revenue estimates again and again.
“This is not the same budget that we were looking at a few weeks ago – certainly very different from the one I started working on back in January,” Aspell said. “It’s in constant flux, and will probably continue to be for a while.”
In this budget, city officials have to plan for July 2020 through July 2021 without knowing what the country’s economic landscape will look like.
Aspell said the city staff began working on the budget in late 2019 when the economy was humming along and the city was enjoying low unemployment rates. As of this week, about 20 percent of the city’s workforce remained unemployed just as some businesses were beginning to reopen.
Even a few months of shutdown can make a big impact. Parking was projected to bring in $3 million this fiscal year, but for the last few months, streets have been virtually empty and revenue is expected to be about $500,000 less than anticipated
The Everett Arena was projected to make half a million dollars this year, but the ice season was cut short.
Water sales account for almost $6 million of the city’s planned revenue for this year, but most restaurants – some of the city’s biggest water customers – are shut down or working a skeleton crew. Revenues are already about $100,000 behind projections
It’s not all bad news, however.
As the economy has slowed down, so has construction, which led to a recent decrease in the number of building permits. Licensing and permit fees were projected to bring in $1.3 million in revenue this year, but due to the accelerated pace of construction earlier this year, that fund is still $100,000 more than was expected.
However, Aspell said a slowdown in construction could have ripple effects.
“That permit many times then translates to an increase in value, the value is what then gets translated into additional property tax money,” Aspell said.
Many city buildings, like the community centers, are closed. However, there are still expenses associated with maintenance and utilities. Other areas where losses have occurred are the city golf course and airport.
“It’s really almost everything,” Aspell said.
City officials will face many of the same challenges as Concord School District officials, who passed the school budget last month, and were forced to trim down their budget increase by almost $1 million after COVID-19. School officials said they expect to receive $700,000 to $800,000 from the Department of Education through the CARES Act, which is in addition to the funding the city will receive.
“One of the things I’m going to try to do is give them the budget that is as nimble as possible, because the way things could change, things could be better than they are today or it could be worse depending on how long the economy stays down,” Aspell said. “The budget really needs to be able to pivot based on the changing economics about what’s going on out there. If it can’t, there will be a problem.”
New expenses associated with the pandemic have largely been buying personal protective and sanitation equipment for first responders.
During its Monday night meeting, the City Council accepted almost $200,000 in emergency funding from the federal government for equipment and overtime.
“There’s a whole series of funding here the city is going after to help recoup our costs,” Aspell said.
However, calls for service and overtime expenses are actually down as a result of the pandemic.
On Monday, Aspell said he submitted a list of first responders for a federal stipend benefit.
“We’ve been keeping track through finance of all of our expenses that are tangentially in any way related to the COVID situation and getting reimbursed from those,” he said
Concord’s mayor Jim Bouley said he paid a visit to the city’s fire department recently and Deputy Chief Sean Brown has a giant whiteboard setup with expenses and federal programs that can offer additional funding.
Aspell and Bouley were among local leaders on a call with Sen. Jeanne Shaheen earlier this week about how COVID-19 is impacting local communities.
“I appreciate that states and local governments are really on the front lines of this pandemic and my goal in Washington is to try to do as much as I can to help support all of you in the effort to address this,” Shaheen said.
Shaheen explained that Congress is working on another package of COVID-19 assistance, which includes $500 billion for state governments and $375 billion for local governments to help cope with lost revenue. The bill was introduced by the House earlier this week.
Bouley said one consideration in Concord is upcoming transportation projects.
“We have several transportation projects, red-listed bridges, and as you look at these stimulus packages, we are going to be looking at how much money there will be for potential infrastructure projects and what will the process be for the distribution of those dollars when they come,” he said.
Shaheen said the new proposed package included $15 billion in transportation grants.
Portsmouth Mayor Rick Becksted said he’s concerned the new aid won’t come in time for the finalization of Portsmouth’s budget.
“I am afraid with some of the levels that we are looking at, creating cuts to positions, positions that I am worried about who we are expecting to do their very best, today: our teachers, our first responders, fire and police, our city staff are very important,” he said. “The last thing this community needs is to do those cuts. This funding process is so crucial.”
“We can only hold out so long as a community before we have to make the decision to do a budget that is fair to both the residents and the community,” he added. “Timing is of the essence in this last package.”
Mayor Tony Giunta in Franklin said he’s worried about if residents will be able to pay their taxes.
“Our unemployment right now in the city of Franklin is approaching 30 percent, and if I was part of that 30 percent, I’ll tell you what, I wouldn’t be sending a check come July 1,” Giunta said. “It’s a situation that has me up at night.”
Aspell, in his budget presentation, said Concord may be better prepared than other municipalities to deal with the financial impact of the crisis.
“Thanks to the City Council’s long-term fiscal planning and to proactive and responsive changes made in Fiscal Year 2020, Concord is in a position to weather the COVID‐19 challenge better than most places,” Aspell said. “That said, we fully anticipate that Concord will not be spared the full impact of this phenomenon with projected increases in unemployment as well as anticipated reductions in key municipal revenues.”