During the presentation, Good outlined specific budgetary information available to the city at this point as well as provided a breakdown of budgeted general fund revenues and their correlating statuses.
The city's two largest budgeted revenues are property and sales taxes, making up 43% and 26%, respectively, of budgeted revenue for FY 2019-20. For property taxes, Good said the city does not expect to see any revenue reductions for this fiscal year, with Good adding that 98% of property taxes had been collected as of March 31.
For FY 2020-21, Good said there may be some variances between preliminary and certified appraisal values collected by Travis County, but added the city still expects a minimal effect on its upcoming budget.
Sales tax revenue outlined April 28 are those collected in February, as sales tax reports are submitted to the city from two months prior. Good confirmed the city does not yet have sales tax information collected during the coronavirus pandemic, but current receipts submitted show the city is $200,000 ahead of budget from February collections.
February collections spiked at $1.2 million, with roughly monthly sales tax rates listed at approximately $1 million, Good said.
Good said the estimated sales tax loss for the duration of FY 2019-20 due to the coronavirus outbreak could vary between 2%-10%, or between $272,000 and $1.1 million lost, depending on severity of impact. With the city not dependent on a single destination retailer or tourism for sales tax revenue, she said that Pflugerville's loss may be minimized compared to other cities.
Among other areas of the budget, Good said the city had 20 full-time equivalent positions open. Good added that City Manager Sereniah Breland has directed city staff to limit hirings at the moment, with the request to look "very judicially" into which positions needed more immediate redressing.
The personnel cost savings related to the limited hirings, Good said, have saved the city approximately $1.7 million. Good added that expenditure reductions related to the limited hiring could offset the potential revenue losses related to the coronavirus outbreak.
The city has a fund balance mandate that requires the city to maintain 25% of its general fund, or approximately three months of operating expenses. Good said that the city currently has 37%, equivalent to roughly five months and approximately $5 million that can be used to assist in mitigating financial effects related to the pandemic.
Good, in addressing a net gain on cash inflows coming into the city, said property taxes are set in the bank, and other revenues are still coming in.
“I think we’re still in a good position," Good said.
Following a question asked by Council Member Jim McDonald, Breland confirmed the city has not furloughed any employees. Mayor Pro Tem Omar Peña asked if any employees have been placed on extended leaves of absences for self-isolation purposes, with Breland responding that a minimal number—"I could count on one hand"—would fall under that categorization.
Breland said deadlines for department budget submissions are approaching, and city staff will compare requests for FY 2020-21 expenditures to revenue in the near future. She added that May 8 is critical for the city to know the sales tax gap it has experienced due to the coronavirus and to understand the implications that may have on the upcoming fiscal year.
Breland said she is not budgeting for reductions across the top but has advised staff to not present any new programs or personnel hirings for FY 2020-21.
“It’s not just a cut across 5%; it may be more of you change the way you provide services or what we provide," Breland said. “It varies by department or services that are essential.”
In response to a question from Council Member Mike Heath, Breland said she has not yet prepared for where budget cuts may need to be made, adding she needs to see "hard numbers" before opening up that discussion.
“We’ve been very conservative and very fiscally responsible, and I appreciate all of the hard work our finance department has put together," Mayor Victor Gonzales said.“I look forward to coming out to the positive when we go to making our final budget decisions.”
