'Tough financial situation' ahead for the City of Rochester
All signs point to another tough budget season for the city of Rochester and Councilmember Malik Evans wants to get a jump on it. The city’s budget typically comes out in May.
Evans chairs the council’s finance committee. At a meeting Tuesday, he told his colleagues that the COVID-19 pandemic has hurt the city’s budget, reducing how much the city receives through sales tax receipts and state aid.
The second-quarter sales tax receipts are not out yet but Evans isn’t optimistic. He also said the state is withholding more than $17 million from last fiscal year and he’s worried that that more will be withheld this year.
Evans said other revenue sources, like downtown parking, are down as well and said the time to start determining priorities is now. He said the council should start monthly work sessions to understand the city’s financial picture this fall.
He pointed to the closing of the downtown Hyatt hotel for the rest of the year as a symbol of how tough the economy is.
“We’re not being chicken little,” Evans said. “This is not like an academic exercise, this is real. And it can get much more real in the next couple of months. And, by the way, coronavirus cases are going up so who knows what the heck we’re gonna be doing in three months.
“What I am saying here is we have a very tough financial situation.And that and we’re going to look to see how we can squeeze every dollar, we all have things that we need to do and the needs aren’t getting any less but the dollars that are there are.”
Evans said Rochester, like other municipalities, is hoping for funding help from the federal government.
“The one hope that we do have is that the federal government can get off their cans and pass a phase three coronavirus relief package,” said Evans.
To balance last fiscal year’s budget, Mayor Lovely Warren issued a mix of furloughs, job-shares and layoffs impacting 400 city employees.
But Evans said this situation could be tougher than last year. He outlined a worst case scenario where the city would have to request permission from the state to borrow money to cover operating expenses.
Evans also said that possibility is avoidable which is what Council President Loretta Scott prefers, because the city’s credit rating took a hit last year when the Rochester City School District overspent its budget. The city routinely borrows money on the district’s behalf in lieu of school aid payments.
Councilmember Michael Patterson called it “bad practice” and said it's more likely that council would lobby the state to borrow from the federal government and made a point to tell city residents that council would only consider this kind of move in a crisis scenario.
“This is the last thing that we would ever want to do,” said Patterson. “And when I say the last thing I mean dragging, kicking and screaming, no thank you, don’t want it. Don’t expect us to do this. If we do this, it's much worse than you think it is.”