Despite the ongoing COVID-19 health crisis, the Sherman Economic Development Corporation is likely going to remain in the black for 2020.
The Sherman Economic Development Corp. presented early budget plans for the 2020-2021 fiscal year during a special meeting Wednesday. As a part of the budget process, SEDCO is projecting that revenues for the current fiscal year will only be below original projections by about $86,000.
“Right now, we are expecting to end this year with a $1.23 million surplus,” “In the beginning, we were expecting a $1.3 million deficit.”
SEDCO’s positive financial outlook comes in a time where many local governments are expecting sales tax revenues to be significantly below original budget as many businesses shuttered due to the pandemic. As a part of the early budgeting process, Sherman is advising departments that there could be a 10 percent reduction on departmental budgets.
However, early indications have shown that the first blow may not have been as hard as anticipated. While SEDCO leaders were expecting March’s sales tax revenues to be upward of 15 percent below the previous year, the actual number was only five percent below 2018-2019.
“That being said, Domino’s still made a killing,” Sharp said.“I think we were lucky that many of our businesses were able to remain open.”
With regard to the swing from a deficit year to a positive, Sharp attributed the change to expenses that did not materialize this year.
The initial budget called for about $2.33 million in incentive payments, however SEDCO now expects only $651,000 will be paid out this year.
“I think most of this we knew before COVID,” Sharp said. “I think some of the companies weren’t developing as quickly as they expected to and that is more reflective of world markets than it is of COVID-19.”
Another savings came in the form of general improvements that were not paid out this year. While the economic developer initially anticipated about $1.55 million in improvements, it is now poised to see $737,000 in savings
Despite SEDCO being prepared to add $1.23 million to its coffers, Sharp noted that the $1.7 million in incentives that were not paid off this year and will be included in the upcoming budget.
For the upcoming fiscal year, SEDCO is planning to have about $6 million in expenses, with a deficit of $1.85 million. However, this would still leave SEDCO with $9.9 million in cash and investments at the end of the year.
Among the new programs that are included in the upcoming budget is an Enterprise Challenge Grant Program. The program would see SEDCO set aside $250,000 for grants aimed at young entrepreneurial businesses in Sherman.
“ Basically it is like a shark tank competition for young companies, entrepreneurial-type companies,” Sharp said. “They can be manufacturing, they can be software development they can be anything that qualifies as a 4-A company.”
Michael Hutchins is the local government reporter for the Herald Democrat. He can be reached at email@example.com.