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The original item was published from 4/30/2020 2:26:52 PM to 7/31/2020 12:00:06 AM.

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Council News and Updates

Posted on: April 30, 2020

[ARCHIVED] Council, Staff Discuss Budget and Expenses in Light of COVID-19 Pandemic

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HUDSON, OH (April 29, 2020) – Through a combination of pro-active measures, careful monitoring, and a phased approach, Hudson City government is keeping up with anticipated financial impacts of the COVID-19 pandemic. At the April 28, 2020 Workshop, Council discussed the budget implications and potential reductions to prepare for the uncertainty of the economic impact of the coronavirus pandemic. With projections coming in about how much of an impact the job losses will have on local government, City staff presented a budget overview of the economic impact to be anticipated during this time. Due to conservative past budgeting and early actions taken to reduce expenses, the City is in a good position to weather this storm.

Soon after the pandemic hit, Council took quick action, deferring $3,689,000 worth of capital projects in anticipation of a pending reduction in revenues. Key projects such as the roads program were not deferred and will move forward.

Early on, the City established a hiring freeze on all open positions and is not hiring back most seasonal and part-time employees. Full-time staff have been temporarily diverted to parks and the golf course work that seasonal employees would normally have performed. While working with less staff, the City continues to make sure the critical services are delivered for residents.

From January through April 2020, income tax revenue was 9.4% over 2019, and the General Fund was up $558,000 over 2019. This is higher than the previous estimate of projected revenues expected to be up 2.5%. This higher than projected revenue has put the City in better shape to ride out the economic impact of the pandemic.

Based on the Regional Income Tax Agency’s (RITA) current projections regarding the impact of job losses during the pandemic, the City could face an estimated $1.2 million loss in the General Fund after factoring in the increase in revenues through April. This is based on RITA’s projection that there will be a 20% loss in income tax withholding in months 3-6, a 10% loss in months 7-9, and a 5% loss in months 10-12 of 2020.

With approximately $5.2 million in total deferrals over all funds, the City currently is projecting a fund balance of $24,775,265 by the end of 2020, which represents a 34.59% fund balance ratio.

With the income tax filing and payment deadline extended until July 15, the City anticipates a delay in filing and payment of net profit and individual returns to months 8-11, which will impact cash flow.

Additional areas the City continues to monitor include property tax delinquencies, the kilowatt hour tax, the gas tax, and the golf course income as the course had to close and then offer limited service for more than a month. A decrease in revenues is anticipated in all these areas, but projections are not yet available.

Based on the work that has been done on revising budgets and operations and the current projections, Hudson is in a good position to handle the economic impact due to the pandemic. These are still only preliminary estimates, and the City will continue to monitor and report to Council the impact as the State begins its reopening plan. 

Council will be discussing the budget and other possible cuts in future workshop meetings.

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