TO: Mayor Richard C. Irvin
FROM: Martin Lyons, Chief Financial Officer/City Treasurer
DATE: March 26, 2020
SUBJECT: title
Financial Report on COVID 19 impact to 2020 City Budget.
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This report will change on a weekly basis as conditions evolve.
The impact of COVID 19 has continued to grow with by far the largest impact being on the country's health and financial stability. The closure of economic activity will have financial impacts well beyond the immediate impact of the virus/health issues currently being faced. The largest impact facing the City from a financial perspective is the continued demand for municipal services without continued revenue sources to support our services. The City of Aurora does not carry a large fund reserve and therefore the loss of revenues is felt quickly when it occurs. Attached is a discussion on revenue losses currently anticipated, but these may increase with each passing week.
Mayor Irvin requested various financial scenarios including a worst case one if the pandemic and local city emergency continues into various times in 2020. This attachment provides one revenue loss scenario in which the City would be able to maintain expenses at 2019 levels until September, 2020. However in so doing, the General Fund will have depleted all of its cash reserves. The General Fund would need to rely on other fund reserves to maintain operations after this point.
Staff is currently working in response to the attached and other scenarios that include major expense reductions if needed similar to those used during the Great Recession. Unlike that process, these changes may need to be implemented much more quickly this year, not waiting until a new budget year. Much like the City's experience from the 2008 recession, Mayor and staff will be exploring all budgeted expenditures and projects moving forward.
Staff is also evaluating recently enacted federal financial assistance programs through the State of Illinois for municipalities and will be evaluating those programs as potential sources of funding for financial relief towards projected deficits resulting from the pandemic.
This report is provided to the Mayor's office on a weekly basis. City Council will also receive financial updates going forward.