Those were the key takeaways from discussion on an item during the council’s meeting April 6, held via teleconference. Ultimately, the council made no action, but the discussion left open the possibility for future steps to reduce costs, including a hiring freeze.
Council Member Nathan Wesely submitted the item for consideration with the effects of the viral outbreak in mind.
“Obviously I don’t know what is going to happen; none of us do, but clearly there’s going to be an impact in terms of both sales tax and permits,” he said.
Wesely pointed to four items that could see an effect in Bellaire’s projected revenue for the fiscal year 2020-21 budget: $2.46 million in sales tax, $1.2 million in permits, about $500,000 in fines, and about $800,000 in recreation fees.
“All of those may be impacted by current events,” he said. “Not only the COVID-19 virus, but also the fairly dramatic drop in oil prices.”
As a result, he recommended the council think about a hiring freeze.
“If we decide a month from now or two months from now that we should not have hired somebody, it’s not impossible, but it’s an extensive proposition to hire somebody, go through all that, then turn around and let them go,” Wesely said.
Bellaire has seven open positions in the general fund: five in the Bellaire Police Department, one in the Bellaire Fire Department and one building official position. Other vacant positions are in the city’s enterprise fund and solid waste and water/wastewater service.
Council Member Catherine Lewis supported the move to reduce expenditures, highlighting the sharp drop in crude oil prices as having a particular effect on the Greater Houston area and by extension the Bellaire economy, noting similarities to the 1986 oil bust.
“I think it’s very unfortunate that we have to go through this again, but it looks like we’re headed that way,” Lewis said. “It’s already happening.”
U.S. crude oil prices per barrel sat at about $61 at the beginning of 2020. Now, they hover in the mid $20s.
“A trainwreck is coming to Bellaire,” she said. “Tax revenues will be seriously down.”
Short- and long-term considerations will need to be made as Bellaire creates its financial forecasts, Hoffman said.
Revenue from the city’s recreation activities, for example, have already been affected by the March 24 "Stay Home, Work Safe" order from Harris County Judge Lina Hidalgo requiring all county residents to stay home if they do not work at a job that is considered essential to the health and safety of the community. A day earlier, Bellaire closed all city buildings to the public and canceled city-sponsored events.