Commission meeting on March 12. PHOTO BY DAVE ONGIE
By Dave Ongie, News Editor
By the middle of March, Johnson City leaders had the first draft of the FY 2021 budget completed.
Using data from the past few years as a guide to determine projected revenues and expenses, City Manager Pete Peterson said the budget was completed under the assumption of “very significant income growth and a very vibrant economy.”
The budget included a 4 percent pay plan adjustment for city employees, which carried a cost of $1.2 million and a cash fund of approximately $1 million to complete a variety of projects. Another $2.5 million to $3 million was earmarked for equipment purchases and debt was to be issued for planned bond-funded capital projects.
However, the spread of COVID-19 and the subsequent global economic shutdown put in place to slow the spread of the virus laid all those plans to waste.
“We were forced to take that budget apart and basically start all over again, because a lot of the things we had originally included in our budget were no longer affordable this coming year,” Peterson told the News & Neighbor last Thursday morning.
And so the budget Johnson City Commissioners passed upon first reading last Thursday night bore little resemblance to the first draft. The retooled FY 2021 came in at just under $238 million, which is around $12 million less than last year’s budget.
Gone is the pay plan adjustment for city employees and the cash fund for projects. Virtually all of the equipment purchases slated for the upcoming fiscal year will be made out of a $1.5 million grant from the state. Johnson City plans to buy a fire truck, 11 police vehicles, seven large school buses and two small school buses with that money.
Additionally, debt that was to be issued in FY 2020 has been bumped to FY 2021.
As the budget was rebuilt, Peterson said city leaders had a lot of conversations with health care professionals to develop a forecast of how COVID-19 might impact the city’s financial picture in the next year. Peterson said they asked about the likelihood of a second wave, how long it might last, and what the long-term financial impact of the novel coronavirus might be.
After getting some answers, city leaders crafted a budget Peterson said was built for the “worst-case scenario.”
“If our worst-case scenario plays out, we have a budget that can deliver the same quality services at the same schedule that we always do,” Peterson said, adding that the budget is balanced and does not include a property tax increase. “Our customers will not see any change in service delivery.”
When looking for areas from which to cut, Peterson said city leaders had three clear goals. The first was to continue delivering the same quality services at the same scheduled intervals. The second goal was to avoid any tax increases, and the third goal was to keep as many people employed as possible.
“In order to deliver those services, we need quality employees, and we need to keep them,” Peterson said. “And the more people we can keep working, the more people we have in the community spending money supporting other people’s businesses. We didn’t have to lay off anybody in the current fiscal year, and we’re not going to eliminate any positions in next year’s budget.”
With that said, Peterson said most vacant positions won’t be filled. The city will also hold off on starting the streetscaping portion of the West Walnut Street project, although storm water work will be completed along with some other water and sewer improvements provided that work would be able to be completed without closing the street to vehicle traffic.
Several school projects that were already in the works will continue as planned this summer. An addition at Indian Trail Intermediate School is scheduled to be completed along with some roofing work at schools around the city.
Peterson also added that the FY 2021 budget can be revisited early next year if economic conditions improve quicker than anticipated.
“We’ll go back in January or early February, and if things are a lot better than what we’ve budgeted for, we’ll do a budget amendment and reallocate the additional revenues and pick up some of the projects and things we’re deferring in the original budget,” he said.
Commissioners will meet in a special called meeting on June 11 to vote on a second reading of the budget. A third reading will follow in order to officially approve the budget ahead of a June 30 deadline.
