Blue Ridge, Ga. – The City of Blue Ridge is facing a substantial projected loss of revenue amid the Covid-19 pandemic.
Department Heads gave updates during the April 2020 Blue Ridge City Council meeting and a theme among these updates was loss of revenue due to many businesses having to close for the month of April.
Finance Director Alicia Stewart informed the Council and Mayor of the city’s projected shortfalls.
“The biggest concern is LOST(Local Option Sales Tax ),” Stewart said, explaining lost revenue to the general fund.
Current projections show a loss of approximately $192,000 in this area. This is a decrease of 22 percent. Stewart also pointed out that Hotel/Motel revenues are projected to have a loss of $37,000 or 21 percent and a loss of $56,000 in SPLOST (Special Purpose Local Option Sales Tax) or 14%.
“As we see what the revenue actually is we would have to adjust the projects,” Stewart said of the projects funded by SPLOST dollars.
All projections were based on limited data from one month.
The water fund is projecting a loss of $405,000.
Despite there being no lag in the utility department and the city still processing the same amount of transactions, overall water consumption has been down during the statewide Shelter In Place.
“We sold 8.6 million gallons less water over a 2 month period,” Utility Director Rebecca Harkins said of the dramatic decrease, pointing to businesses, hotels and schools being closed as a reason for less usage.
This decrease in demand leads the department to a $124,000 shortfall, which can be mostly negated (short $6,000) if demand were to rise back to pre-pandemic levels and staffing remain the same.
Mayor Donna Whitener shared that the city would currently receive no help from the United States Department of Agriculture, “I’ve asked for deferments on some of our payments like our water plant and our sewer plant which are two of our biggest payments. USDA, at this point, is not doing any deferment.”
Council-member Mike Panter asked Stewart directly, “What’s your projection of our total shortfall for the year?”
Stewart replied that including all funds the city is projected to have $873,000 in lost revenues.
To combat these losses, Stewart and Harkins said that payroll is an area to consider, which the city has already begun with temporary layoffs and reduced hours for employees.
Stewart also says that delaying capital outlay and spending only what is necessary are steps the city should take for the foreseeable future.
“There is reserves, cash reserves,” Stewart also explained of overcoming the city’s revenue shortfall. Policy according to Stewart is to have 25 percent of budget in reserves. This translates into $700,000 in city reserves and an additional $945,000 in the water fund.
The Federal Emergency Management Agency (FEMA) will also be reimbursing state and local government entities for spending directly related to Covid-19.
The City of Blue Ridge hopes to be reimbursed $26,000 for materials purchased such as hand sanitizer and laptops for telework The city is also seeking reimbursement for legal expenses related to Covid-19 and hazard pay for city police.
Like many other government entities, the City of Blue Ridge is awaiting financial reports for May and June to see if the economy will have a swift recovery.