The Clovis City Council on Monday, May 18 introduced a budget of $282.4 million for the 2020-2021 fiscal year. Like city and state governments across the nation, Clovis is going to have to rely on its emergency reserve funds to make ends meet.
In the wake of COVID-19, the city is projecting a loss of roughly $10 million to the general fund. With businesses closed and most residents staying home or limiting their spending, a significant blow has been dealt to sales tax revenue.
The city is projecting a 12.6 percent decline in revenue from sales tax. In a normal fiscal year, revenue from sales tax make up a significant part of the city’s general fund. Funds garnered through sales tax normally make up about 38 percent of the city’s general fund.
To make up for the lost revenue, the city will pull $2 million from its reserves, utilize money leftover from the previous year’s budget and limit expenditures in an effort to ensure a balanced budget. The city does not have plans to lay off any employees, though.
“We cut as much as we could without going as far as laying off employees. We thought that would be an overreaction at this point at least,” City Manager Luke Serpa told the members of the council.
“The 2020-2021 Annual Budget is not a status quo budget,” the executive summary presented to the City Council stated. “This budget forecasts the need to use emergency reserves to balance a proposed structurally imbalanced budget,” the executive summary read.
After pulling $2 million from the emergency reserve, the city is estimating it will have $10.8 million still left in the reserves at the end of the 2020-2021 fiscal year in June of 2021.
“Our plan is to introduce this budget now but we will continue monitoring… what’s happening to our revenue stream, what’s happening at the federal level,” Serpa told the council members.
The city has instituted a hiring freeze, which has left 19 positions open within the city. Most of those are either police or fire positions, Serpa said.
At this point, the Clovis City Council has not yet approved the budget, which will likely occur on June 1 after further debate.