Developing a 2020-21 budget is indeed a challenge for the town's new CFO, David Gephart. The goal of the budget, which will be provided to council in a week, is: "...to position the town to be able to weather a longer storm should that happen and to also have some contingency dollars available in case the early predictions [of economic recovery] do not come through as planned."
"The total proposed budget will be 3% less in 2021"
In a LOVE interview last week, Town Manager Mary Jacobs told us that "The only reason why it doesn't feel like it's going to be as bad next fiscal year is that we did so well this fiscal year." One factor is that the town is completing its first full year of on-line sales tax revenue collection. "We expect a very sharp drop off in sales tax revenues for the first six months of the year." By the end of the fiscal year, she believes that the town will be collecting sales tax revenue at the pre Covid-19 shutdown level.
A cautious approach
"We're still early in the process. We will have some additional reserves available in the budget for contingency if we're far off. We'll be very carefully monitoring both expenditures and revenues on a monthly basis. I'll be holding off on some of our projects [until] I feel comfortable that our projections are coming in as we planned because that will still give us an opportunity to make additional cuts. We want to moderate the impact on services to the community."
Shifting economic development focus
The Covid-19 pandemic will alter the business landscape. The town will experience a pause in economic growth, perhaps until next year. The town's economic development focus will need to shift. Jacobs identified two areas where a shift in focus may be appropriate.
"One thing that we can do is to focus on industries that are not going to suffer, like Biotechnology. That's our niche." The University of Arizona Incubator is moving forward. "We can look at how we can help those startup companies and attract other companies as well."
The second area is in-store retailing. Oro Valley has focused on attracting retailers to the community. Its been a long-term strategy. Times have changed. Long before the shutdown, consumers were shifting spending to online shopping. Oro Valley, like many communities, has empty store fronts.
The crisis has accelerated that consumer buying shift to online. Jacobs believes that the town should consider "... code changes that would broaden potential uses to primary employers in some of our other commercial areas so we can see some reuse in shopping spots... because 'brick and motor' is a problem and there is a lot of space out there."
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