Despite the expected revenue loss, he said the city has enough in reserves and is financially stable.
Rock Island began the 2020 fiscal year with $28.3 million in cash and investments across all of the funds with the exception of police and fire pension funds, Tweet said. The city has $6.8 million in the general fund representing 71 days of that fund's expenditures.
"This will help the city to weather the cash flow impact in the near term, but staff will be reviewing planned expenditures to help mitigate the negative impact of revenue shortfalls and when working on the 2021 budget, fund balances will be important to keep in mind," Tweet said.
The city budgeted for $37 million in revenue for 2020. The expected loss of at least $3 million equals 8 percent of the general fund, Tweet said, with the hope that economic activity will begin to recover in June.
"The largest impact will come from sales taxes," he said. "Combined, these revenues make up 17 percent of the general fund and we are currently estimating a 23 percent shortfall. We also expect to see an estimated 13 percent decline in other general fund revenues such as income tax and PPRT (personal property replacement tax.)"
Tweet said losses from hotel and motel taxes, gas and video gaming taxes will likely be in the range of $300,000. However, he said it is hard to estimate the impact from the loss in hotel and motel taxes with the uncertainty of when occupancy will return to previous levels.
Mayor Mike Thoms said in his annual state of the city address in January that the city has experienced flat revenue growth for several years. Despite $30 million in private investments in the city in 2019, it will take some time before the city sees revenue from it.
Tweet said the city is continuing to operate as best it can under the circumstances while providing essential services to residents. Most city employees have been working remotely and on rotating shifts, including police, fire, water treatment and distribution, sewer collection and treatment, refuse, recycling and yard waste collections and street repairs.
"Although buildings are closed to the public, we continue to issue and process utility bills, building permits, conduct building inspections, process zoning issues and process small business grant applications and issue grant funds," Tweet said. "In addition to the normal online services, the library is offering story time and instructional classes. The parks department is hosting online fitness classes and concerts. Employees are following established protocol and workers in the field are provided with the appropriate PPE."
To save money, the city has suspended hiring for open positions, put off capital improvement projects, vehicle and equipment purchases and delayed official travel and professional development.
Tweet said department directors are reviewing 2020 expenditures, programs and projects and will recommend cost saving measures for the remainder of 2020.
No city employees have been furloughed and there are no immediate plans to furlough employees. The hiring of seasonal workers has been delayed.
"The city employees are very dedicated and have been very positive and supportive," Thoms said. "They’ve been very creative and flexible on adjusting their workloads and work conditions. The citizens have not seen any change in essential services. Some nonessential projects are still getting done but maybe not quite at the pace they normally were. The citizens of Rock Island have been understanding and supportive."
Tweet said most residents have continued paying their monthly water and utilities bills.
"We are actually very busy processing payments through the mail, our lockbox and phone payments," he said. "We fully expect that (unpaid) balances will be paid over time and are prepared to work with residents and businesses through our established payment plan process."
Concerned about COVID-19?
Sign up now to get the most recent coronavirus headlines and other important local and national news sent to your email inbox daily.