City revenues take a hit as COVID-19 limits sales tax collections

El Dorado City Hall -- News-Times file
El Dorado City Hall -- News-Times file

Fallout from the coronavirus (COVID-19) outbreak has struck multiple facets of everyday life in communities across the globe, including local economies and municipal governments.

With several El Dorado businesses temporarily closing or curtailing operations due to the COVID-19 pandemic, local sales tax revenues have taken a hit over the past few weeks and the city of El Dorado is feeling the pinch the first quarter into its 2020 budget.

Due to the economic instability that has been created worldwide by COVID-19, Vance Williamson, an El Dorado City Council member and chairman of the city’s Finance Committee, asked city department heads in March to avoid spending from their budgets, “unless absolutely necessary,” in preparation of financial uncertainties that could lay ahead in the coming weeks and months.

The spending moratorium included previously approved and allotted funds, as well as those from the El Dorado Works tax.

Williamson spoke of the possibility of a “major downfall in (city) revenues.”

Those concerns were validated last week when the Finance Committee, other city officials and department heads convened to review revenues and expenditures in 2020 city budget.

“The latest revenues are going down drastically already and that’s before all the store closings and so I expect an extreme, drastic cut in revenues next month … Some of the general fund revenue that we get from taxes, that’s going south,” Williamson said during the meeting.

He also said revenue from fuel sales at South Arkansas Regional Airport “has already gone in the gutter” and airport manager Jonathan Estes said the drop in income will result in the layoff of one of four airport employees.

Williamson noted, however, that state turnback funds had not yet come in. He also noted that the state of Arkansas is on tap to receive $1.25 billion of the $2 trillion federal stimulus package outlined in the CARES (Coronavirus Aid, Relief and Economic Security) Act.

“But that bill is such a monstrosity that nobody knows where it’s going or how it’s going to trickle down to cities,” he said, telling city officials that he had spoken with state Rep. Matthew Shepherd (R-El Dorado) about the matter.

He said he had also spoken with city department heads and asked for ideas on how to save money and about any cost-cutting measures they are taking.

Williamson also asked department heads for a status report on how their departments are faring in the midst of the COVID-19.

Fire department

Fire Chief Chad Mosby said the fire department has issued a directive halting all non-essential spending.

“The only thing that we’re really spending on right now is anything that’s broke that needs to be fixed or any supplies that we have, particularly any medical supplies. Whenever we find them in availability, we’re trying to buy them up now because they’re in short supply,” Mosby said.

An area in which the EFD does not expect to spend money is training, meals and lodging.

“Everything where we were planning to send people off has been canceled. Now, that’s going to be a very, very small portion of the budget,” he said.

Mosby said the EFD anticipates an increase in the volume of calls for service and sick leave within the EFD in the coming weeks “as (COVID-19) exposure starts to happen” more in El Dorado, noting that fire departments in other cities have gone down to critical levels of staffing to maintain service.

The EFD is limiting exposure to the virus in as many ways as it can and Mosby said he’s placed a restriction on fire department employees who work part-time in other health care fields.

Mosby urged all city departments to keep track of COVID-19-response-related expenses, such as supplies and overtime pay, that incur during the outbreak.

He explained that although federal guidelines have not yet been set or released, money was included in the stimulus bill for municipalities and he said the city should try and reimburse costs that are associated with COVID-19 response.

Police department

Police Chief Kenny Hickman said the El Dorado Police Department budget is on track for the first quarter of the year.

He said there has been a slight increase in overtime due to multiple factors.

Hickman said the EPD is also doing what it can to stop the spread of COVID-19 exposure, including restricting public access to EPD headquarters and taking reports of minor offenses by phone and determining if a physical response is needed.

“We’re trying to keep ourselves available for emergency situations … to avoid significant manpower shortages,” Hickman said.

There is an adequate supply of masks and gloves for officers “right now” but the department is growing short of sanitizing supplies inside EPD headquarters, Hickman said.

Like the fire department, he said the EPD has limited its spending to essential items and also expects to save money in the travel, lodging and training line items of the police department’s budget. Clothing, cleaning and equipment allowances have also been temporarily frozen, with the exception of legitimate, impromptu needs.

A training event that is still open but has been placed on hold is for new tasers that EPD officers will be using, the chief said.

He said officers are still working part-time jobs in order to be available to help improve safety at local businesses.

Public Works

Robert Edmonds, director of public works, said “the bare minimum amount” of people are at work to provide essential city services, including garbage collection, water and wastewater services and some “pothole repairs.”

Edmonds said city employees are broken up into small groups to minimize contact with each other.

“We’re just trying to navigate it the best we can and keep our people healthy enough so that we can continue to provide those essential services through the duration of this, whether it be 90 days or until October. No one knows,” he said.

He said engineering work has been halted for improvements to Fifth Street, the bid process suspended for the construction of new soccer fields and concessions plaza at the El Dorado-Union County Recreation Complex and the contract for services has been temporarily frozen between the city and Boys and Girls Club of El Dorado, who manages the complex.

He noted that activities have been suspended at the complex due to the coronavirus, so “there’s nothing to manage.”

Edmonds also said mowing has been cut down to once per month at the complex.

Council Member Dianne Hammond asked that the city perform the service after Edmonds said the city had sought a per unit price for the mowing service at the complex, per a decision that was previously made by the complex’s board of directors.

Williamson said the city should consider severing any contracts it can to save money.

Council members advised Edmonds to hold bids for the next phase of the downtown sidewalk improvement project.

About a week before the COVID-19 pandemic reached El Dorado and Union County, Edmonds said the final documents on the project had come in from the Arkansas Department of Transportation.

He said the city’s portion of a grant that will be used for the next phase of the project, which covers the area of Cedar, Washington and Locust, is approximately $300,000.

Edmonds said bids had already been let on the project and council members advised him to hold any bids that are received until further notice.

Municipal airport

Estes reported that fuel costs are far outpacing fuel revenue at South Arkansas Regional Airport at Goodwin Field.

He said all commercial, transient and other types of flights have virtually ceased at the airport. He said goals for fuel sales at SARA are at 18,000 gallons per month and as of March 31, the number was just above 15,000 gallons.

Such conditions have forced the airport to move to a skeleton crew, Estes said, adding that he planned to lay off one of SARA four employees and move an employee to a weekend shift, leaving Estes and a senior employee to cover the 5 a.m. to 5 p.m. shift that is required by Essential Air Service provider Southern Airways Express.

Estes said he counted one commercial airline passenger in four days

“That’s terrible for the airline, that’s terrible for us and everyone,” Estes said.

He noted that Murphy Oil is purchasing fuel from SARA as much as possible to help keep the airport operational, telling council members that Murphy has its own fuel farm and does not have to purchase fuel from the fixed-base operation.

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