The city of Denison is reducing its budget for the current year by $1.26 million in the face of reduced projected revenues amid the ongoing COVID-19 pandemic.
The City Council approved a budget amendment that projects about $1.03 million in lost revenue — and ending with a $139,000 deficit— Monday night as the city approaches the end of its current fiscal year.
"Based on staff’s projections that we did for revenue for the remainder of fiscal year 2020, it is appropriate and prudent to reduce expenses in all city divisions to keep keep these fund balances above the minimum fund requirements," Denison Finance Director Renee’ Waggoner said Monday.
The budget reduction comes as the city is expecting a reduction in revenues related to the fallout from the COVID-19 pandemic. While Denison has seen only modest hits to its sales tax revenues, and still has seen growth over the past year, other cities have seen double-digit reductions in sales tax revenues amid business closures during March, April and May.
"I will say that we hope that if our sales tax revenue continues to come in strong, as it has the last few months, it is likely that the deficit will be erased come October 1," City Manager Jud Rex said.
Rex said the city balanced the budget primarily through reductions in capital projects and through staff positions that went vacant.
Among the capital projects that have been delayed as a part of cost-reduction efforts is design on two projects that will update Loy Lake Road and Waterloo Lake Drive, Rex said. Additionally, the city reduced its sewer projects from $8 million to $4.5 million for the year.
"People and projects is really what it boils down to," he said.
Meanwhile, the city’s utility fund is expected to be in the black by about $80,000 thanks in part due to cost reductions. The budget update included $416,000 in expense reductions for the utility fund, leaving it with about 69 days worth of reserve funding.