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Financial effects of COVID-19

Post Date:04/28/2020 9:30 PM

On Tuesday, April 28, the City Council held a budget discussion to discuss COVID-19’s impacts on the City of Pflugerville’s finances. 

The City utilized the services of both Eight20 Consulting and The Retail Coach to conduct an analysis of the City’s financial footprint in the midst of COVID-19. Eight20 Consulting examined sales tax reductions and The Retail Coach provided a Retail Impact Analysis on retail foot traffic in Pflugerville. 

“Pflugerville is resilient. We have always been,” Mayor Victor Gonzales said.  “While we’re anticipating a shortfall in sales tax and other revenues due to COVID-19, sales tax is one component of the City’s diversified revenue sources. We are continuing essential programs and services thanks to our conservative financing.” 
The Eight20 Consulting report predicts sales tax revenues in Pflugerville will be down approximately 40% over previous years during the months of April and May.  Foot traffic in retail and grocery stores is a third of what it was prior to COVID-19, according to The Retail Coach report. Sales tax makes up 26% of the City’s general fund revenue, however it is one of many revenue sources, including property tax which accounts for 43% of city revenues overall.

The construction market in Pflugerville continues to be a significant generator of sales tax revenue, and has not slowed during COVID-19. Project Charm, currently under construction on FM 1825, has contributed to additional building permit revenues for the year. 

In the event the City’s revenue is significantly impacted by COVID-19, there are options for the City to mitigate impacts on the General Fund in FY20. At the start of COVID-19, the City limited hiring which resulted in salary and benefit savings. As part of the CARES Act, the City was awarded a special allocation of $158,241 in Community Development Block Grant Funding for the reimbursement of eligible activities incurred for pandemic response. In addition, the City is required by the City’s Charter to hold a minimum fund balance of 25% or three months of city operating expenditures. Through conservative budgeting, the City has built a fund balance which can help mitigate the financial effects of this COVID-19 emergency situation. 

For information on COVID-19 and impacts on city services and facility operations, visit www.pflugervilletx.gov/virus. 

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