The city of Round Rock is cutting $8.9 million from its current fiscal year budget to brace for revenue impacts related to the COVID-19 pandemic.
The Round Rock City Council on Thursday night approved a budget amendment to make the cuts following a presentation from Chief Financial Officer Susan Morgan.
Morgan said although the city entered the pandemic in a strong financial condition, the city’s sales tax, hotel occupancy tax and other revenues are expected to take a significant hit this year with the closure of many local businesses affected by the pandemic.
Morgan estimated the city will lose between $8.9 to $10.3 million from its general fund, or a 27% decline from last year. The city’s tourism funds, which are used to pay for the city’s sports tourism and artsefforts, will lose $3.4 million to $4 million by the end of this fiscal year on Sept. 30, she said.
Morgan stressed the numbers are still preliminary.
She identified approximately $8.9 million in expenditures reductions, which include cuts to travel, training, non-essential overtime and other spending.
Morgan recommended reducing operating expenditures by $1 million and allocating $1.9 million in tourism fund balances to cover shortfalls this year.
Other steps to offset losses include delaying or eliminating capital purchases; freezing most vacant positions; and freezing salary adjustment funds.
Approximately $2.9 million in capital projects will be delayed, including Behrens Ranch Park improvements, public safety training enhancements, technology projects and other previously schedule purchases.
The City Council first received a presentation on the potential budget cuts during an April 9 meeting.
Morgan said the city’s hotel occupancy revenues and tourism funds are expected to see a drastic decline in revenues this fiscal year, since March through June is the city’s peak season for tourism.
Four hotels in Round Rock, with a total of 608 rooms, are closed, while others are reporting half or less occupancy than normal.
Morgan said the city will continue monitoring revenues, look for cost reduction opportunities and update its budget strategy as more data about the COVID-19′s effects on the economy become available.
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