Germantown finance commission endorses extending current budget

Commission will wait to review 2020-21 budget

By Updated: April 07, 2020 10:04 PM CT | Published: April 07, 2020 10:04 PM CT

With the uncertainty surrounding coronavirus, Germantown’s Financial Advisory Commission unanimously recommended Tuesday night to extend the current budget into the new fiscal year rather than adopting a new financial plan this summer.

Commissioners met virtually to discuss the budget Tuesday evening, the group’s first session since COVID-19 took effect in Shelby County.


Germantown Board of Education to review revised land swap


“I appreciate the support,” City Administrator Patrick Lawton told commissioners. “We would not move forward without the support of the finance commission. We think this is the right thing to do.”

Lawton initially asked for a recommendation in a few weeks, but Commissioner Russell Johnson made a motion that the city continue to work under the same budget.

The FAC’s recommendation still must go to the Board of Mayor and Aldermen for final approval. As a resolution, it only needs one reading instead of the three that routinely accompany the budget and property tax rate.

There was no decision on the property tax rate.

The budget resolution – under state law and the city charter – allows the current financial blueprint will stay in effect until a 2020-21 budget is adopted by aldermen.

“What we have now (allotted for certain areas) will continue,” Lawton said.

The resolution allows the city to get a “clearer picture on revenues,” according to Lawton.

City budget experts are confident with leaving the current plan in place, Lawton said, because of Germantown’s history of financial responsibility.


Germantown aldermen delay naming parliamentarian until March 25


The city will monitor expenditures and may need budget adjustments before the end of the fiscal year on June 30, Lawton said by phone following the meeting.

“This is an unprecedented time,” Lawton said, noting it is tough to predict revenues. “We want to have a budget we can live with and support the community.”

<strong>Rocky Janda</strong>

Rocky Janda

“I think it makes an awful lot of sense,” Aldermen Rocky Janda told commissioners.

Commissioner Jason Lowe favored the action, noting the city might develop a reasonable budget plan if the scenarios surrounding the pandemic clarify.

Adrienne Royals, Germantown’s budget and financial services director,  said the suburb expects about $2.5 million less in revenues than projected by the end of the 2019-20 budget year on June 30. Lawton said estimating revenues is  “like throwing darts.”

“FY21 is a different story,” Lawton said. “Revenue projections are even murkier. … We are trying to get a handle on when all this will be over.”

Lawton said city officials are trying to address the changes connected to coronavirus. They have stopped unnecessary spending and the administration will ask for rejection of recent contracts. Additionally the city laid off all part-time employees.

“Budgeting practices have been turned upside down,” Lawton told commissioners.

While the administration projects some spending increases, Lawton said that was based on legal costs and estimations the city incurred in the past year. 

About 50% of sales tax revenues come from businesses such as Whole Foods, Trader Joe’s, Kroger, Amazon, Cork’s Wine and Spirits and Target, Royals said. Those stores have remained open, but Janda noted even a probable uptick in grocery sales tax will not make up the remaining half.

While some models project a hint of normalcy by the end of April, Lawton said the city is taking a conservative approach and “planning for the worst.”

“We will never give up hope,” he said, noting he and city leaders expect this to last well beyond April.

“Our view is: don’t expect a turnaround soon and even when it does it’s going to take a lot of the economic community” to get back to where it was, Lawton said.

The city is looking at how to use its federal and state funds. Germantown expects to receive $892,855 from Gov. Bill Lee’s local government support program. The funding permits certain uses such as IT hardware, upgrades, capital maintenance, utility systems, road projects, public safety and response to the pandemic.

“Staff is working to revisit our capital budget and see how we might be able to use some of those general reserve dollars and offset them with this,” Lawon said.

He said the money should be used for one-time expenditures since the city should not expect the state money annually. 

When asked, Lawton said uncertain revenue projections make it difficult to produce a FY21 budget. Royals and FAC members noted figures are likely to change daily.

Contacted about the FAC decision, Alderman Scott Sanders said: “I’m not against the continuing resolution. It actually makes sense since we can’t really properly project revenues at this time. “

Topics

Germantown Germantown Financial Advisory Commission Patrick Lawton 2020-21 budget
Abigail Warren

Abigail Warren

Abigail Warren  is a lifelong resident of Shelby County and a graduate of the University of Memphis.  She has worked for several local publications and covers the suburbs for The Daily Memphian.


Comment On This Story

Email Editions

Sign up for our morning and evening editions, plus breaking news.