The staff and department heads have pretty much wrapped up the recommended budget in time for the City Council meeting on June 11, when the first reading of the budget will be held.
Some of the uncertainty on COVID-19’s impact of the economy will soon be answered when the state Senate provides information on the local option sales tax revenue for April. That was the first full month of the stay-at-home directive.
While most people would assume revenues would be down significantly with the decline and stoppage of much of the retail business, Mayor Curt Alexander said several supermarket managers have told him they had very good months. Alexander said the city also does not rely heavily on hotel and motel taxes, so there won’t be a hit in that revenue.
But Elizabethton Finance Director Preston Cobb said it is best to assume foer a sharp downturn and set a conservative budget. “That way, if things are not so bad, we can have a very good meeting later in the year where we can put some of the things back in.” Cobb said such a happy meeting would be in late fall or around Christmas time.
But for now, it is time for budget cuts. Cobb said those cuts would be made in capital expenditures and not in operations. That means that capital expenditures will be postponed for a year, but personnel and city services to citizens will not be cut.
It is still a big cut, though. The total cut in the general fund is $2,185,818. The 2019-20 budget for the general fund is $19,536,405. The 2020-2021 budget proposed by staff is $17,350,587.
Not all of that cut an actual loss of spending. A big chunk: $566,671, is just an accounting change that would have been made even if there had not been a plan to cut the budget. That change is just a more accurate way to account for reimbursements from the Elizabethton Electric Department. The change is only for more accurate accounting and does not mean there is any change act all in the reimbursements the electric department normally makes.