Denison general fund ends fiscal year $435k in the red
Denison officially closed out the 2019-2020 fiscal year in the red for its general fund. The City Council approved a series of budget amendments last week aimed at closing out the fiscal year, which ended on Oct. 1.
The updated budget shows that the city's general fund saw $434,911 of expenses over its revenues for the year. City officials attributed this in part to the COVID-19 pandemic, which temporarily closed many businesses and proved to be a financial nightmare for many municipalities across the country.
"I think '20 was a tough year for every city, but we see a pretty good finish to the year, especially to our utility fund," City Manager Jud Rex said, noting budget cuts earlier this year to both the general and utility funds.
At year's end, the city saw $28.48 million in revenues against $28.92 million in expenses for its general fund. This came after the city adjusted its budget mid year to account for the pandemic. Despite this, revenues still fell below projections and expenses were slightly higher than expected.
These efforts included cutting expenses in the budget by nearly $746,000. However, expenses ultimately were slightly above these modified projections and were over budget by $88,471. Likewise, revenue projects were reduced by nearly $950,000 mid-year due to the pandemic. However, final totals were $156,527 below the modified projections.
Denison, along with many cities across the country, initially worried that the pandemic would have its great impacts shown in the city's sales tax revenues, with some municipalities projecting a 15 percent decrease or higher for the year.
"We did lose a lot of revenue, but not from sales tax as expected," Rex said. "It was from other revenue sources, so it was a bit of a hit to the general fund."
At year's end, the city had collected $6.07 million in sales tax revenues — about $182,000 under what was initially budgeted. Heavier impacts were seen in other city tax revenue streams and the city's ambulance services, which came in $678,837 under what was projected.
These new totals put the city's days of reserve funding at 55 days, down from the 64 which were originally projected at the beginning of the cycle.
While 2020 was a difficult year for the city's general fund, the utility fund earned money in 2020. Initially city officials projected $13.93 million in utility revenues, but instead the city saw a slight increase with $14.01 million in revenues. This comes despite the city dropping projections to just under $13.5 million in revenues.
Rex said these funds will likely go into the reserve fund, which is projected to sit at 76 days of reserve.
Despite the less-than-expected end to the year, city leaders said there is a silver lining to the clouds hovering over 2020. About $726,000 of expenses are likely to be reimbursed in 2021 through the CARES Act. Of these funds, about $579,000 will go to the general fund. An additional $125,000 will go to the Denison Independent School District for the purchase of laptops and mobile hotspots for its students that are learning from home.
"Even by now, we are balancing things out," Rex said.