In an emergency called meeting Friday morning to address COVID-19 and the city’s responses to the situation, Waynesboro City Council adopted a resolution forgiving penalty and interest on unpaid meals and lodging taxes through June 30 as part of city efforts to relieve some financial impacts of coronavirus on the community.
“This work is in response to the council’s guidance to provide some relief to local businesses in light of the economic impacts of the COVID-19 and the governor’s emergency medical restrictions on assemblage of restaurants and bars, and obviously that will have an enormously negative effect on our businesses,” said Mike Hamp, city manager. “The ordinance relieves those establishments from penalty and interest on late payments due in March through June 30. Effectively, the ordinance establishes the rate of interest and the rate of penalty at 0%, so there’s no penalty or interest accruing.”
The original resolution provided this relief through May 31, but Mayor Terry Short moved to extend the relief period through June 30, as he said that, after speaking with many local businesses, these establishments would still be recovering from the impact of the COVID-19 outbreak past May 31, needing time to get back on their feet. The rest of the council members unanimously agreed with Short’s motion.
Council also officially adopted the state of emergency declaration, which became effective at 6 p.m. on March 16. Declaring a state of emergency will allow the city access to some state and federal government funding and resources to help get through the COVID-19 pandemic, Hamp explained.
Hamp said that the city’s response to combating the virus and adjusting operations accordingly is comprised of three main components.
“First, preserving and protecting the safety of our employees. Second, maintaining without interruption core and essential services; and thirdly, fulfilling our role as the local government in modeling, and effecting, and communicating in partnership with state and federal agencies to support their response in public education,” Hamp said. “It’s been necessary to adjust, obviously, the ways that we pursue business and encounter residents. I imagine that, going forward, additional adjustments will be required. I want the council and community to know that, as we apply these adjustments, we’re doing so, we believe, in a measured and gradual manner that is fitting to achieve the objectives that are communicated at the time, but not so onerous to be disruptive or inconvenient to the community.”
Deputy City Manager James Shaw told council there will undoubtedly be a financial impact on the city both during and after the pandemic, predicting city staff will have to amend its budget in response to the situation as it develops.
“We’ve got to at least be aware, and probably increasingly so, that this will have a financial impact on the city. That our resources are not limitless,” Shaw said. “The first line of defense, so to speak, in terms of your financial resources is austerity. That you start to pull back your expenditures. The next would be utilization of your fund balance. I would suggest that that should be a last line of defense. That those resources are not without limit, and you have another fiscal year that’s looming.”
Shaw said city staff feel conflicted preparing a budget for presentation due to the unknowns of the ever-shifting situation. Usually, finances for a budget can be predicted fairly accurately based on the calculation formulas in place, he said. However, the pandemic has created an unpredictable situation where those normal methods suddenly do not apply so easily.
“It’s very difficult to subjectively go in and adjust those formulas, but that’s the challenge that we’re up against in thinking about the next fiscal year,” Shaw said.
With so much subject to change and adjustment, it is unclear as yet how the COVID-19 crisis will impact council’s budget priorities established at their budget retreat last winter — a list that included raising city workers’ salaries.
Shaw proposed a tentative idea being considered that would have city council adopt a six-month budget in response to the current environment. After that period, they would adopt a budget for the remaining six months of the year, based on where things stand at that time. Although Shaw said he has never implemented a budget strategy such as that before, he knows it is possible to do.
“I don’t want to paint a picture too dire, but neither do I want to lead anybody to believe that our finances won’t be affected, or that we won’t have to respond to that,” he said. “The optimist in me says that this passes quickly, and that it’s not going to be as extreme as we might think. The realist in me says that you’d better prepare for something, perhaps, a little more drastic.”