DOWNERS GROVE - It could be much worse.
That was the message Downers Grove Village Manager Dave Fieldman delivered Tuesday to the village council during his monthly COVID-19 response plan update.
“I am very happy to say we are nowhere near the worst case scenario in our outlook now,” Fieldman said.
Village revenue sources have significantly declined, but Fieldman was able to point to some good news as the coronavirus pandemic moves into its eighth month.
One week ago, Fieldman delivered the news that the village had received about $2.5 million in federal funds via the CARES Act.
On Tuesday, he pointed out that the village’s sales tax revenue, which took a major hit in March and April, recovered between May and July. In fact, July sales tax receipts outperformed July 2019, he said.
“So this is great news,” Fieldman said. “Staff is looking into the components that drove such great performance in July of 2020, and we eagerly await the August numbers to see if this is a trend of if there were other considerations that had to do with the timing of payments or other activity in the local economy.”
Fieldman provided a closer look at the performance of the major sources of village revenue.
Sales tax revenue through July was $6.5 million, down from $7.1 million through July of 2019. Home rule sales tax revenue was approximately $905,000 through July, down from $1,047,403 through the first seven months of 2019, he said.
Food and beverage tax revenue stands at $1.061 million through August compared to almost $1.3 million through August 2019. Finally, hotel tax revenue stands at $257,537 through August, down significantly from $664,747 through the corresponding period in 2019.
“Hotel tax revenue is a very different story with continued very poor performance,” Fieldman said.
In total, the village is experiencing about a 16% decrease in revenue, Fieldman said.
For the year, the general fund revenue is estimated between $40.5 million and $45.5 million, which is $4.3 million short of budgeted revenue.
“The bottom line is that staff estimates that the deficit or gap in 2020 general fund will range from $1.3 million to $7.3 million,” Fieldman said. He added, however, that the gap is expected to be at the lower end of the range.
The answers to some key questions will help determine the size of the gap, Fieldman said.
First, how will the food and beverage tax revenue perform with a decline in outdoor dining? Additionally, how much sales tax and home rule sales revenue will the village garner in the holiday season?
Additionally, when and to what extent will hotel tax revenue performance show improvement? And, when and to what extent will commuter parking increase?
The village put together a four-tier response plan soon after the pandemic began.
“Our goal is to be a sustainable and resilient village government,” Fieldman said.
Receiving federal and state assistance, such as the CARES Act grant, is one part of the response plan to the pandemic. Additionally, the village has also reduced general fund expenses and deferred equipment replacement. A hiring freeze is in place and staff travel and training has been eliminated, Fieldman said.
The village has deferred $6.5 million worth of projects in the capital and major buildings funds. If necessary, the village has $2.4 million of asset forfeiture fund available and can tap into general fund reserves.
However, the village continues to meet its goal of providing essential services during the crisis, Fieldman said.