Frederick’s fiscal 2021 budget will be impacted by the COVID-19 pandemic that has swept the country, although the virus’ toll remains to be seen.
City staff will likely present a budget amendment to the mayor and aldermen that lowers projected revenues during the budget process in April and May, but they don’t know by how much, Frederick Director of Budget and Purchasing Katie Barkdoll said.
How much revenue is lost depends on how long the pandemic lasts and when things start to return to normal, she said.
For instance, the city’s Clustered Spires golf course is closed because of the virus during what would be the beginning of golf season, Barkdoll said.
The course was projected to create about $1.4 million in revenues in fiscal 2021, which would break even with projected costs, according to a summary of the proposed budget.
Meanwhile, the city’s projections for parking revenues will depend on when more people come downtown after stores, bars and restaurants reopen for shopping and dine-in service.
The city’s fiscal 2020 adopted budget included more than $3.8 million in revenues from the city’s parking decks, and $913,572 collected from parking meters. The proposed fiscal 2021 budget currently includes slightly lower, but similar projections.
The city’s revenues will also take a hit in areas such as highway user revenue, which comes from the state based on gasoline sales, which are down with fewer drivers on the roads.
And the city’s main source of its admissions and amusement tax, the Frederick Keys, currently have their season on hold because of the virus.
Mayor Michael O’Connor and the city’s aldermen will meet virtually at 7 p.m. Tuesday for the first of four public meetings on the proposed budget. The proposed operating budget is about $105 million.
The budget will have to be amended to reflect the new realities, O’Connor told the aldermen at a special meeting last week to approve the new schedule of budget hearings.
But they won’t be able to guess how any additional spread of the virus could affect the budget’s development.
“It’s just going to be a budget process unlike anything I’ve participated in,” O’Connor said.
Alderman Roger Wilson thanked O’Connor and the city’s staff in a statement for their work in putting the budget together.
But the proposed budget doesn’t reflect the “economic turmoil the pandemic has caused — and will continue to cause — across the state of Maryland,” Wilson said.
Wilson supports including a contingency fund in the budget to buy a reserve of personal protective equipment for first responders and others on the front lines when battling a pandemic.
The city’s responsibility is to continue to provide services to protect the health, safety and welfare of its residents, Alderwoman Kelly Russell said in an email.
O’Connor’s proposed budget seems to do that and more, but they’ll still have to address the volatile financial situation created by the coronavirus, she said.
“It remains to be seen if we will need to make substantial adjustments based on reduced revenues and elevated health and safety needs,” Russell said. “We will have to be nimble and creative in order to respond to the changing landscape.”
The virus has already shortened the timeframe that the mayor and aldermen have to discuss the budget, which was introduced about two weeks later than normal this year.
Alderman Ben MacShane said he thinks O’Connor’s draft budget contains some great steps toward providing for city residents.
But there’s no doubt they’ll need to make some changes in light of the new realities they face, he said.
MacShane said the city needs to be cautious with its spending, without hurting essential programs.
“We need to defer things that we can defer without major impacts,” he said.
Alderwoman Donna Kuzemchak said that could create a more difficult process.
“Time is always an issue,” she said in an email. “I think the more difficult issue is being able to talk with staff and throw ideas back and forth with staff and other elected officials.”
The process may result in a budget that’s not as well thought out and discussed as previous ones have been, Kuzemchak said, “but we are doing the best we can in unprecedented circumstances.”
The unpredictability that the pandemic creates has impacted the entire process of analyzing the budget, Barkdoll said.
The city’s staff has talked with the Maryland Municipal League and other groups, but everyone’s view is clouded by the same uncertainty.
“They don’t have answers either,” Barkdoll said.