City projecting 6% decrease in sales and use tax revenue for 2020-21
By Jeff Harrison
Facing potential losses in revenue due to the coronavirus, Midwest City leaders are taking a conservative approach towards finances.
The city council recently approved a $161.5 million budget for the 2020-21 fiscal year, which begins July 1. The budget included about 9% or $15.5 million less than the current year.
Midwest City is projecting a 6% decline in sales and use tax compared to the current year, according to Christy Barron, finance director. Sales and use tax collections were up about $1 million for the current fiscal year but have seen dips in recent months.
“I never would’ve imagined we’d be going through something unprecedented like this,” said City Manager Tim Lyon.
Lyon said preserving jobs was one of the priorities of the budget. While the city will retain all full-time employees, they were not able to provide merit increases or cost-of-living adjustments for employees. Lyon said they plan to revisit the issue later depending on revenue totals. The city has not yet negotiated contracts with the police and firefighter unions.
“In October, we’ll make a determination if we can do merit increases,” he said. “And if we do that, we’ll recommend to the council that we retro those back to July 1.”
The city will not fill 12 positions due to a hiring freeze. They cut two positions – a wellness coordinator, special events marketing coordinator – and moved employees to different positions.
Lyon said the city curbed spending for capital projects for the new fiscal year.
“Last year we spent a lot on capital and this year we cut way back,” he said. “And it was not just because of the revenue projections, it was because we had spent so much last year that we needed to build back our balances in a bunch of these capital accounts.”
Some of the larger capital projects for this year include engineering for resurfacing Midwest Boulevard between SE 29th and NE 10th streets, Palmer Loop Trail extension, sidewalks on Kittyhawk Dr. from Lockeed Dr. to Key Blvd., signal upgrades at NE 23rd St. and Post Rd., engineering work for school zone flasher upgrades, and engineering for the SE 29th St. bridge over Crutcho Creek.
The city projects general revenue funds of about $34.3 million. About $8.8 million is transferred to the police department and $7.1 to the fire department. The remaining money will support many city services such as streets, neighborhood services, finance, parks and recreation, IT, emergency response center, city clerk, and human resources.
The police department has the largest budget with about $14.6 million, a decrease of about $607,000 from the current year. It includes about $441,000 for nine marked patrol vehicles, equipment for vehicles and four body cameras.
The fire department, the next largest department, will have a budget of $11.7 million for 2020-21, which is about $100,000 less than the current year. It includes about $550,000 in capital purchases for a brush pumper truck, bunker gear, communications equipment and annual contributions towards fire truck replacement. The budget is expected to have a deficit of about $600,000.
The police department budget appears to be in better shape, largely due to vacancies, Lyon said. The police department has four positions open, while the fire department is fully staffed.
Lyon said the city will need to increase rates for wastewater recovery, and possibly water.
Midwest City will continue to offer many of the programs and projects that contribute to quality of life for residents. Lyon said that includes special events such as Tribute to Liberty, programs at the Charles J. Johnson building, Neighborhood Services, Neighborhoods in Action, the Senior Citizens Center and the Boys and Girls Club of Oklahoma County.
The general obligation bond projects are not impacted the by the budget and will continue as scheduled.
The city council hosted a budget workshop on May 19 and approved the budget on June 9.