Pandemic causes city budget shortfall
Marshalltown is looking at a $65,000 budget shortfall for the fiscal year because of the COVID-19 pandemic.
The pandemic has decreased the city’s revenues and the Marshalltown City Council will discuss the budget shortfall and the pandemic’s fiscal impact during Monday’s regular meeting.
“Through June 30, because of the way that we receive payments, we’re looking at about a $32,000 loss in revenue,” said Diane Steiner, finance director. “It’s not too big of a reduction for hotel/motel taxes. It’s going to hit us next fiscal year.”
The city is going to need to budget $33,800 to cover expenses regularly covered by those lost revenues.
Between this item and the reduced revenues, this leaves a shortfall of $65,000.
The loss in revenue comes from courts being closed and no court fines coming in, the loss of library fine collections and parks and campgrounds being closed,
Some of the loss of revenue is from the hotel/motel tax. That tax usually is split between the city and the visitors bureau.
“Sixty-seven percent of it goes to the visitors bureau and the remaining we use for the general fund,” Steiner said.
The visitors bureau in turn uses those funds to try to bring in more visitors. A shortfall in the process can cause problems both for city tourism and the city’s budget.
With such a short time remaining in this fiscal year, it is difficult to reduce line item spending. However, when recalculating personnel expenses, there are enough savings to cover the shortfall, according to city documents.
A lot of the savings comes from vacated positions and retirements from the fiscal year, mostly in the police department.
Departments will continue to have reduced spending in other areas as well, such as travel. COVID-19 expenses are being tracked for grants and FEMA, so those will be at least partially reimbursed.
Steiner would not comment on the ramifications for the city’s budget if the pandemic continues indefinitely.
“We don’t know what the council’s going to decide,” she said. “We’re just here to give them scenarios and present some facts. It’s their decision what they would close and what they would keep open.”
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