CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
title
Receive the January 2021 Financial Report
body
DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Finance Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In response to the unprecedented economic impacts of the COVID-19 pandemic, staff began issuing a monthly financial report in May 2020. This monthly report allowed Council to make strategic financial decisions at the appropriate time based on the most current information. Staff will continue to bring a financial report to the Council at its second meeting of each month in 2021. These reports will continue to track financial and economic data that provide insight into the short and long-term fiscal impacts of the pandemic. This first report of the year provides a preliminary, unaudited review of the City's 2020 financial results.
DISCUSSION:
The various economic and fiscal impacts of the COVID-19 pandemic have been discussed in detail during monthly financial presentations and the 2021 budget approval process. Beginning in March 2020, efforts to mitigate the spread of the virus began having a significant impact on business activity in the community, which ultimately impacted City revenues. Economically-sensitive revenue streams, such as sales, motor fuel, food and beverage, and hotel/motel taxes, were all immediately impacted by mitigation efforts that resulted in reduced consumer spending.
Early in the pandemic, staff estimated the revenue impact to the General Fund at $18 million. Staff continued to refine that estimate over the following months as more information became available. By the second half of the year, it became clear that revenue impacts would be less severe than the initial estimate. The pandemic's impact on state income tax never came to fruition and sales taxes recovered to near pre-pandemic levels more quickly than anticipated. Regardless, staff continued to monitor revenues closely as constantly changing mitigation strategies ...
Click here for full text