Newport News projects a $1.2 million surplus
Newport News is projecting a $1.2 million surplus in its general fund for the first quarter of the fiscal year 2021.
“When we created this budget in the early days of the pandemic, and every month since then, we have said that we will live within the revenues that we generate,” said LisaCipriano,thecity’sbudget director.
Thecityinstitutedaseriesof cost-cutting measures, including a hiring freeze except for essential and critical positions and delaying programs and events.
The major revenues — real estate, personal property and machinery and tool taxes — thatmakeupabout56%ofthe generalfundrevenueestimate are“sound”andexpectedtobe on target with the city’s estimate,CiprianotoldCityCouncil on Tuesday.
“The first quarter is always themostdifficulttoestimatein any fiscal year,” Cipriano said. “What makes 2021 a really interesting year to do estimates is there are no patterns or set rules to estimate revenues during a pandemic.”
Fiscalyear2020hada“very hot, very strong” first nine months, but then finished withwhatCiprianodescribed as a “stone-cold” final three months as the pandemic took hold.
The fiscal year projections were as of Sept. 30, and the surplus does not include any CARESfunding.Ciprianosaid the city is awaiting the federal government’s decision about whethertoprovideadditional CARES money. The CARES funds will be applied to any eligible general fund expenditures after the final review of
the funds is completed at the end of December.
Several smaller sources of revenue have been hampered as well. Revenue from public gatherings, which include things like amusements, lodging, car rental and festivals has gone down as in-person events have been canceled or postponed.
Regal Cinema reopened to the public in Newport News and then was closed by the nationalofficewithinthesame week, Cipriano said.
“Thecollections foramusement tax — while not very large — is unpredictable at this point. Anything travel related is sporadic, but all of these we’re watching,” Cipriano said.
Business, Professional and Occupational License taxes have been strong the past three years, Cipriano said, but this year it has had an uneven pattern. The category includes retailers and wholesalersandprofessionals, which have been affected by business closures. Therepairs and contracting section have remained strong.
The city is also monitoring revenue from fines and court activity, commer
cial and consumer revenue and Department of Human Services program reimbursements.
“We suspect that while the need is there, these programs are being funded through other CARES program and federal areas,” Cipriano said of the DHSprograms.
The city is prepared for some revenue changes in the upcoming quarters, including the end of federal unemployment support at the end of December. The city also has several major sources of revenue to collect over the comingmonths,CityManager Cynthia Rohlf said in a report to City Council.
Rohlf said there is potential for “better than anticipated performance of select consumer-generated taxes and fees.” The city expects to have a better idea of year-end results after the second quarter.
The operating budget for the general fund this year is around $514 million, which is approximately $18 million more than the adopted fiscal year 2020 operating budget.