The ongoing COVID-19 pandemic is going to hurt the District of Houston’s revenue stream from its leisure facilities but also provide some cost savings, a financial planning document presented to council Nov. 3 calculates.
Reductions in the use of the leisure centre and the arena could cut revenues next year anywhere from $91,8799 to a worst-case $198,341, the document indicates as senior staffers prepare income and spending plans for next year and beyond.
But a reduction in council and staff travel owing to the pandemic would reduce expenditures over traditional patterns by a projected $116,235.
Overall, with other cost saving measures, the base budget operating deficit from the worst case leisure facility and arena revenue loss would be cut to $37,683, the document estimates.
These and other spending and cost savings projections, along with projected taxation and utility increases, were presented to council Nov. 3 for general guidance leading up to the budget for 2021 and the 2021-2015 longer term financial plan.
The document calls for a 2.7 per cent net property tax increase amounting to $114,980 and a two per cent increase in water, garbage, arena, parks and cemetery user fees and a five per cent increase in sewer fees and in the frontage tax rate for next year’s budget.
Council approved of the overall base budget direction as presented by senior staffers, including the reduction to budget for the worst-case loss of $193,341 from arena and leisure facility revenues.
That figure accounts for a projected 70 per cent leisure facility revenue loss of $157,816 and a projected 50 per cent arena revenue loss of $40,525.
Other budgetary planning includes:
– no changes in service or staffing levels except for arena and leisure service hours due to COVID-19. But sanitizing the arena may require more staffing hours, something not included in the proposed base budget.
– salary, wage, overhead and benefits increases from existing contracts plus a consumer price index bump in mayor and council remuneration will cost $11,870 more in 2021 compared to 2020.
– an increase by two per cent of money being put into various District reserve accounts such as ones to pay for maintenance, equipment replacements, fire department needs and general infrastructure improvements. The sewer capital reserve infusion is to increase by 5 per cent with a 5 per cent increase in sewer user fees.
The budgetary planning document did, however, introduce a cautionary note about the District’s ability to maintain and improve its road network and its buildings.
“Overall, the operating funds remain viable for the short term, but do not allow for significant capital reinvestment or long-term capital planning,” it stated.
Based on existing asset data, the District is not able to meet its infrastructure reinvestment goals utilizing the existing operating budget, and current capital plans will further draw down existing reserves and surplus funds.”
The District’s list of buildings requiring replacement in the years ahead include the community hall and fire hall.
Planning for major projects includes the need to apply for senior government grants.