After eliminating a number of summer programs due to financial concerns stemming from COVID-19, Manchester City Administrator Larry Perney presented additional budget reduction recommendations at the May 18 Board of Aldermen meeting.
Perney prepared a spreadsheet outlining five possible financial forecasts, which ranged from a low of 7.37% to a high of 23.98% in revenue loss.
After conferring with Mayor Mike Clement and analyzing available data, it was determined the impact may land at a deficit of 11.44% in the general fund, which translates to $1,176,210. The city only saw a 1.37% reduction in sales tax for March 2020 as compared to March 2019. However, data for April will not be available until mid-June. Therefore, these numbers are fluid and only the best guess estimate.
Finance Director Donald Yucuis explained that within city limits there are two big box stores and two grocery stores that remained open as essential businesses during the pandemic, which will help lessen the impact of COVID-19.
A significant portion of the savings come from closing the Manchester Aquatic Center [$316,801] and budget cuts within the police department [$222,920]. However, each city department reduced its budget, resulting in a total savings of $751,255 across the city. The budget reductions represent the elimination of public relation events as well as training, education, travel and conference expenses. The city remains committed to preserving employment, salaries and benefits.
Even with the recommended budget cuts, the city anticipates a budget deficit of $424,955. To help offset that deficit, the city is looking at county, state and federal funds to backfill the budget.
On May 18, the board unanimously passed a resolution requesting that municipalities within St. Louis County receive an equitable distribution of the $175 million in funding received by St. Louis County from the Coronavirus Aid Relief and Economic Security [CARES] Act to reimburse municipal police for actual incurred costs relating to COVID-19.
The U.S. Congress enacted the CARES Act providing a $2 trillion economic relief package to provide assistance for American workers and families; provide assistance for small businesses; provide assistance to state and local governments; and to preserve jobs for American industry. The state of Missouri received $1.9 billion from the CARES Act, of which St. Louis County received $175 million.
According to Treasury Department guidelines, CARES eligible expenditures include payroll expenses for public safety efforts dedicated to the mitigation of or responding to the COVID-19 public health emergency from March 27 through Dec. 31.
During the pandemic, the Manchester Police Department was not fully staffed, operating with three fewer officers due to a hiring freeze. However, the city incurred public safety payroll costs estimated to be in the amount of $424,803 in payroll and $138,487 in related fringe benefit costs for a total of $563,290, which are presumed by the US Department of the Treasury to be COVID related expenses.