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Home My WebLink AboutCOVID-19 Financial Impact UpdateSTAFF PRESENTATION TO FOLLOW: 1 r I C04;qui h CITY OF lOVVA CITY 410 East Washington Street Iowa City, Iowa S2240-1826 (319) 356-5000 (3I9) 356-5009 FAX www.icgov.org City of Iowa City COVID-19 PANDEMIC FINANCIAL IMPACT UPDATE JULY 2020 Dennis Bockenstedt, Finance Director COVID-19significai impacted funds City of Iowa City Fund Structure Non -Budgetary Budgetary Funds 7Funcls Special Revenue Debt Service Enterprise Capital Projects Internal Service General Fund Funds Fund Funds Fund Funds General* CDBG Debt Service Parking Capital Projects Equipment HOME Grant Transit Risk Management *includes Emergency Fund Road Use Tax Wastewater Information Technology Services Other Shared Water Central Services Revenues Metro Planning fitly Organization of Refuse Collection Health Insurance Johnson County Employee Benefits Landfill Dental Insurance Emergency Levy Airport Affordable Housing Storm Water Agency Funds Peninsula Apartments Housing Authority Project G reen Tax Increment Financing Self -Supporting Municipal Improvement District COVID-19 FINANCIAL IMPACT UPDATE Revenue Impacts: • Lower hotel/motel tax collections • Reduced parks & recreation, senior center, and other program fees • Reduced fine and permit revenue • Higher unpaid property taxes Hotel/motel tax collections Reduced parks & recreation, senior center, and other program fees Reduced fine and permit revenue Property Taxes Total Impact *Actual figures are Generalpreliminary Fund — COV I D-19 FY2020 Revenue Impact 6 -month estimate: $ 350,000 12 -month estimate: $ 650,000 6 -month estimate: $ 500,000 12 -month estimate: $ 1,000,000 6 -month estimate: $ 550,000 12 -month estimate: $ 1,150,000 6 -month estimate: $ 0 12 -month estimate: $ 0 6 -month estimate: $ 1,400,000 12 -month estimate: $ 2,800,000 7 J Summary: o FY2020 — • Revenue shortfall - $ 1,766,832 • Total equals 2.50% of revenue • Reduced expenditures by cutting consulting fees, travel & training, capital outlay purchases, recreation programs, delaying filling open positions, and using the General Fund contingency • Bottom line: Revenue shortfalls were offset with expenditure reductions. o FY2021— • 6 -month revenue shortfall - $ 1,400,000 • 12 -month revenue shortfall - $ 2,800,000 • Total equals 1.89% and 3.79% of revenue, respectively • Bottom line: Revenue shortfalls are expected to be covered by expenditure cuts, but the fund will be monitored monthly. If property tax receipts remain low or other revenues begin to drop further, additional cuts may be necessary. COVID-19 FINANCIAL IMPACT UPDATE Revenue Impact: • Reduced Road Use Tax collections Road Use Tax collections Total im Road Use Tax Fund — COVI D-19 FY2020 Revenue Impact *Actual figures are preliminary 6 -month estimate: $ 440,000 12 -month estimate: $ 880,000 6 -month estimate: $ 440,000 12 -month estimate: $ 880,000 Summary: o FY2020 - • Revenue shortfall - $0 • Reduced CIP transfers by $500,000 • Bottom line: Revenue shortfall did not happen; CIP reduction will help mitigate FY2021 revenue shortfall FY2021- MOT revenue shortfall estimate is 10% • 6 -month revenue shortfall - $440,000 • 12 -month revenue shortfall - $880,000 Bottom line: Revenues will be evaluated monthly; FY2020 CIP reduction should cover FY2021 6 -month revenue shortfall. Future expenditure and CIP adjustments may be necessary. COVID-19 FINANCIAL I M PACT Revenue Impact: • Parking revenues reduced due to demand/enforcement Parking revenues reduced Total impact Parking Fund — COVID-19 FY2020 Revenue Impact *Actual figures are preliminary 6 -month estimate: $ 11500,000 12 -month estimate: $ 21750,000 6 -month estimate: $ 11500,000 12 -month estimate: $ 21750,000 Summary: o FY2020 — • Revenue shortfall - $1,508,815 • Total equals 24.22% of revenue • Paid off Harrison Street Parking Ramp lease which eliminated debt coverage requirements & fund use restrictions; helps future cash flows Bottom line: 50% of revenue shortfall was covered by expenditure and CIP cuts. o FY2021— • 6 -month revenue shortfall - $1,500,000 • 12 -month revenue shortfall - $2,750,000 • Total equals 25.27% and 46.33% of revenue, respectively • Bottom line: Fund will be monitored weekly; fund is still projecting a structural deficit. Additional expenditure cuts and reductions may be necessary. COVID-19 FINANCIAL IMPACT UPDATE Revenue Impacts: • Bus fares and passes reduced • Court Street Transportation Center parking charges reduced J Bus fares and passes Court Street Transportation Center parking charges Total impact Transit Fund — COVID-19 *Actual figures are FY2020 Revenue Impact preliminary 6 -month estimate: $ 510,000 12 -month estimate: $ 1,020,000 6 -month estimate: $ 230,000 12 -month estimate: $ 400,000 6 -month estimate: $ 740,000 12 -month estimate: $ 1,420,000 Summary: o FY2020 - • Revenue shortfall - $356,320 • Total equals 4.21% of revenue • CARES Act Funding - $5.1 million available • Bottom line: Revenue shortfall will be covered by CARES Act funding. FY2021- • 6 -month revenue shortfall - $740,000 • 12 -month revenue shortfall - $1,420,000 • Total equals 8.67% and 16.63% of revenue, respectively • CARES Act Funding - $5.1 million available • Bottom line: Revenue shortfall will be covered by CARES Act funding. COVID-19 FINANCIAL IMPACT UPDATE Revenue Impacts: • Reduced revenue from late fees and shut-off notices • Reduced water consumption • Delayed 5% rate increase for 3 months Late fees and shut-off notices Reduced water consumption Total impact Water Fund — COVI D-19 *Actual figures are FY2020 Revenue Impact preliminary 6 -month estimate: $ 240,000 12 -month estimate: $ 475,000 6 -month estimate: $ 220,000 12 -month estimate: $ 450,000 6 -month estimate: $ 460,000 12 -month estimate: $ 925,000 7 Summary: o FY2020 - Revenue shortfall - $133,469 • Total equals 2.73% of revenue • Past due accounts — 932 accounts totaling $156,048 Bottom line: Revenue shortfall was absorbed by continued operation of P&G beauty lines. FY2021- • 6 -month revenue shortfall - $460,000 • 12 -month revenue shortfall - $925,000 • Total equals 4.60% and 7.26% of revenue, respectively • Bottom line: Revenues will be monitored monthly; further drop in P&G usage coupled with other revenue shortfalls could cause bond coverage issues. Property tax collections were at 98% ■ Delayed late penalties and no property tax sale ■ $1.1 million of uncollected property taxes in FY2020 ■ Could have substantial impact on property tax supported funds Sewer revenues were down ■ Lower University of Iowa water usage ■ Will be monitored for long-term trends and consequences Interest income revenues are dropping ■ Federal funds rate near 0% ■ Impact on this revenue is not immediate due to unmatured investments ■ Will impact most funds General Fund ■ Experiencing broad based revenue declines ■ Expenditure cuts and spending freezes are expected to mitigate revenue shortfall Road Use Tax Fund ■ State is projecting a 10% revenue shortfall ■ Will be monitored monthly, but FY2020 CIP cut should cover FY2021 6 -month shortfall Parking Fund ■ Continues to be stressed financially ■ Will be monitored weekly and may require further intervention Transit Fund ■ Drop in operating revenues ■ CARES Act funding will mitigate revenue shortfall Water Fund ■ Late fee and shut-off notice revenues have declined ■ July 5% rate increase postponed for 3 months ■ P&G water usage will help mitigate revenue shortfalls ■ Will be monitored monthly to ensure bond coverage is met Any questions? STAFF PRESENTATION CONCLUDED � r rrM as � h CITY OF IOWA CITY 410 East Washington Strect Iowa City, Iowa 52240-1826 (3 19) 356-5000 (3 19) 356-5009 FAX www. icgov. o rg