GFOAz – Questions/Answers Regarding COVID-19
March 20, 2020 at 10:10 pm #1211ADMINKeymaster
Thank you for taking the time to answer these questions, please see below for responses. You can also find information regarding COVID-19 on the League’s website: http://www.azleague.org, which is continuously being updated.
Current FY20 budget, are you taking any short-term actions (i.e., hiring freezes, reductions in budget, postponement of capital projects, travel/training freezes, etc.)?
In your proposed FY21 budget, are you:
Making changes to your proposed FY21 budget in preparation for a potential recession?
Re-thinking possible COLA and/or merit increases for FY21?
Avondale – In your current FY20 budget, are you taking any short-term actions (i.e., hiring freezes, reductions in budget, postponement of capital projects, travel/training freezes, etc.)? – Not at this time. For hiring, all positions are approved by the City Manager’s office, so we will continue to evaluate a hiring freeze. In your proposed FY21 budget, are you: Making changes to your proposed FY21 budget in preparation for a potential recession? Not at this time. Re-thinking possible COLA and/or merit increases for FY21? Not at this time. We are planning a COLA and Merit on July 1. –Robert Baer, Budget Manager
Camp Verde– At this time: No FY20 Budget freezes due to Covid-19 virus, No changes to FY21 budget due to potential recession but that is a factor in our budget development. We have not as a Town discussed COLA/Merit yet though there are potential opportunities for both. We will know more once we hit mid/late April. –Michael Showers, Finance Director
Cave Creek – FY 20: 1. We are not currently postponing projects specifically because of COVID-19 in FY 20, although there are projects that have been postponed or carried forward to the next fiscal year. 2. We have discontinued travel and in person training unless it is for emergency purposes related to the health, safety and welfare of our residents.
FY21: 1. We have withdrawn and postponed projects contemplated for FY 21 based on revised revenue projections because of the increased potential of reduced sales tax revenues in FY 21 because of COVID-19. 2. We are considering eliminating COLA for FY 21 because we are completing a market study of wages and benefits in FY 20. As a result, we may increase wages to match the market or freeze pay of positions instead of a COLA. Merit increases may also be eliminated or reduced because of the market adjustments or freezes based on the market comparisons. –Robert Weddigen, Finance Director
Cottonwood– Yes we are going to do a hiring freeze, no additional capital that isn’t already approved and scheduled for the current year, no travel and training unless they can’t get a refund and if things continue most likely we will reduce discretionary spending for FY 2020. For FY 2021 we are going to budget for a recession and we will be looking at our revenues closely, most likely may end up cutting budgets and currently there will be no COLAs or Merits for FY 2021. –Kirsten Lennon, Finance Director
Eager- No travel unless necessary and approved. –Kate Brady, Finance Director
El Mirage – El Mirage has declared a state of emergency and taken the following actions: Non-essential training is prohibited, Hiring will only be done if essential for operations. These changes are not budget related but rather a preventative measure to address social distancing. Once the emergency is lifted these should be restored. COLA and Merit increases are still planned for FY 20 and FY 21. – Robert Nilles, Deputy City Manager/Finance Director
Florence- Current FY 20 Budget- We have hiring freezes and postponing capital outlay or projects. We had had an immediate effect on revenues projected out to the end of the fiscal year for FY 20-21- We are preparing for possible prison closure (loss of significant revenue), attrition in staffing, looking at programming in recreation, looking at reductions in revenue and as always ways to do more with less. We are not considering COLAs and considering no merit for this next year. All is dependent upon how the budget is managed and what conservation methods are applied across the board. – Becki Jimenez, Finance Director
Goodyear- Current Budget – No changes to expenditures, we have reduced sales tax revenue projections. FY2021 – we are re-thinking the entire budget. We have delayed adoption until the latest possible date. Overall we believe we will be adopting a status Quo budget with a significant contingency amount to allow us to either delay or provide funding for ongoing and capital proposals as we get a better handle on the impacts this will have. –Doug Sandstrom, Finance Director
Guadalupe- Guadalupe staff is nearly ready to propose the town budget and a five-year forecast with several scenarios. The outlook is somewhat grim. Below is where we are at with revenues. We do have 3 hotels that benefit from baseball spring training that will not happen. We have a few restaurants that will also suffer. State sales tax will also be impacted. Other misc. revenue such as ballparks and events will also be impacted. We have no grocery stores.
What assumptions do you want built into the BASE model for the upcoming recession for the following: My projections will be conservative.
- Local Sales Tax 33% less (received April-June) & July going forward through October.
- Transient Occupancy 75 % less (received April-June) & July going forward through October.
- Restaurant Bar Tax 20% less (received April-June) & July going forward through October.
- State Sales Tax (is there by any chance any guidance from the Arizona department of revenue?) 20% less. (received April-June) & July going forward through October. No guidance has been offered. I have called and they are not prepared to provide estimates at this time. They are working on it though. – Finance Director Robert Thaxton
La Paz County – I likely will reduce revenue projections, however, it is possible that if Covid-19 burns itself out in 105 days like it has in Wuhan, spending may rebound in late summer. Time will tell on this one. The most important issue will be the limitation of the spread. If this thing does not spread, the economy should spring back quickly. The winners in all of this have been the short sellers and correctly positioned day traders. Other than this limited group, the entire world has taken a hit that few could see coming. –Terry Krukemyer, Finance Director
Marana- For Marana, changes are being made on a daily basis. We have already restricted travel. We have updated our leave/telecommuting policy to limit the number of employees physically working at the Town facilities. We are continuing to have discussions regarding our FY21 budget and are considering the impact to our sales tax due to closures or limited customer interactions as well as potential changes that will be occurring in the economy. At this time, everything is very fluid. –Starla Anderson, Deputy Finance Director
Peoria- In your current FY20 budget, are you taking any short-term actions (i.e., hiring freezes, reductions in budget, postponement of capital projects, travel/training freezes, etc.)? So far, the only concrete action we’ve taken with respect to the FY20 budget is to indefinitely suspend all nonessential business travel. Executive management has asked department directors and managers to scrutinize any new spending for the rest of the fiscal year.
In your proposed FY21 budget, are you: Making changes to your proposed FY21 budget in preparation for a potential recession? As of this writing, staff is recommending to the City Council that we adopt a “baseline budget” for FY21. This means that we will now defer most of the items we had planned to include in the proposed budget, especially any ongoing additions such as new FTEs.
Re-thinking possible COLA and/or merit increases for FY21 For now we are including in the FY21 budget the COLA and merit increases approved in the MOUs with our various labor groups. However, compensation will remain on the table for adjustment/reductions as we get closer to the new fiscal year and the impact of the pandemic becomes clearer. –Peter Christensen, Budget Manager
Phoenix-Mesa Gateway Airport- We have suspended all business travel and training (although this is partially as a result of substantially all the events being canceled). We are delaying all non-essential operating expenditures to the extent possible; however, our capital is so far un-impacted. We are completing in process hiring, however, no new hiring will be completed at this point. This is all for FY20. We have made no changes to our FY21 budget as a result of this, which was passed by our board this week, as we believe it is simply too early for us to gage the full impact of what is happening. –Brian Lehrich, Accounting Director
Prescott Valley- In your current FY20 budget, are you taking any short-term actions (i.e., hiring freezes, reductions in budget, postponement of capital projects, travel/training freezes, etc.)? Yes, hiring freeze, expenditure freeze, and no out-of-Town trainings or travel. Any large projects will be postponed when feasible.
In your proposed FY21 budget, are you: Making changes to your proposed FY21 budget in preparation for a potential recession? Yes, reduction to both operating and capital budgets.
Re-thinking possible COLA and/or merit increases for FY21? Yes, for FY21 there will be no COLA and merit increases have also been removed from the budget. –Katie Pehl, Finance Director
Safford- City of Safford is taking precautions. We are having a low level hiring freeze. All current and future vacancies will be reviewed by the Human Resources Officer and the City Manager to verify the necessity of the position prior to it being filled. We are recommending that all department managers only purchase necessities from now through the end of the fiscal year. We have suspended all travel related to training, but still allowing online trainings. We are reviewing our proposed 2021 budget. Currently we are looking at a possible 10% decrease with some revenues and reducing expenditures accordingly. No decision has been made regarding how we will handle increases for employees for the next fiscal year. –Alma Flores, Finance Officer
San Luis – These are very uncertain times, and it is difficult to predict with confidence the financial impact the COVID pandemic will have on the City, and how long would it last. For our next year budget we are been cautious and we are projecting a decrease in tax revenue. We are also recommending to delay non-priority capital expenditures, and proposing a reduction in spending to all departments. We are not considering hiring freezes for existing positions, however, the addition of newly created positions most likely will be postponed. – Monica Castro, Director of Finance
Scottsdale- In our current FY 2019/20 budget we are reviewing all current recruitments and considering a hiring freeze. Additionally, we are planning to freeze all out of state travel/training, which most is getting cancelled anyway.
For FY 2020/21, we assumed a downturn in the economy and therefore had already forecasted significant reductions in our sales tax revenue in our five-year financial plan. We will not have actual sales tax numbers for March until early May. If additional downward adjustments are necessary based on actual data as we receive it, we will address sources and uses at that time. Additionally, (at this time) we are still including a merit/market in our Proposed FY 2020/21, which will be presented to City council on April 7. –Judy Doyle, Budget Director
Yuma- FY20 Budget: Travel/Training—non-essential business travel/training canceled or postponed. Emergency Leave implemented-80 hours max during 2-week school closure (3/16/20-3/29-20)
FY21 Budget: Recession? Early in process-will continue to monitor economic conditions. Revenue projections and assumptions likely to be scaled back to more historical levels. Lower revenue estimates will have some impact on increases to recurring expenses, including recommendations for scale and/or anniversary increases—Budget Review Team meets next week to discuss possible changes to our initial recommendations. –Tony Struck, Budget Director
May 6, 2020 at 6:32 pm #firstname.lastname@example.orgParticipant
The City of Page has placed a hiring freeze on all open positions due to the COVID-19 issue. We have also been asked to move to a “necessary spend only” for operating costs for the final quarter of the fiscal year. Major purchases that were budgeted in FY 2020 and not made yet, have been placed on hold and are brought before the City Manager and City Council on an individual basis for approval. We have had to make the difficult decision to lay off 27 of our employees in the month of April 2020.
For the FY 2021 Budget, most travel expenses have been cut or drastically reduced except for mandatory travel/training only. We have taken a hard look at our future capital projects and have pushed many of the projects that could be pushed, out to FY 2022 for budgeting and completion. All performance/COLA increases have been taken out of the budget for FY 2021. We have looked at 23 of our vacant positions that were yet to be filled in the FY 2020 budget year, and have eliminated the majority of these from being filled in FY 2021.
Page does not have any other dedicated revenue source outside of Sales Tax, and with the COVID-19 Federal/State mandates and business closures, we are not going to see that sales tax revenue come in. Being tourism is our main revenue generator, we have already begun to see the downturn of lost revenue and are trying to prepare for what is to come as many City’s are experiencing similar outcomes.
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