Story provided by City of Stillwater
The economic impacts of the COVID-19 pandemic are already shaping up to be significant for the county, the state, and Stillwater.
Mayor Will Joyce’s first Emergency Declaration was issued March 15, 2020. This proclamation closed some city facilities and meetings, limited in-person gatherings, and called for restrictions that applied to restaurants and the personal services industry.
Since then, several more local and state proclamations have called for additional or extended restrictions. Oklahoma State University closed the campus after spring break and moved to online classes resulting in many students leaving town. Stillwater Public Schools also closed and moved to online classes for the remainder of the semester.
With large segments of the economy, including businesses that generate sales tax, shut down to stop the spread of the novel coronavirus, the City of Stillwater’s revenues are most likely going to decline sharply. In Oklahoma, sales tax is the largest source of recurring revenue for municipalities. In Stillwater, 58% of the general fund (which is used to pay for public safety, parks, street and sidewalk projects, library, and more) is from sales tax collection.
The question is how much will sales tax decline.
City Manager Norman McNickle estimates that the City could lose as much as $12 to $18 million in sales tax, which is ¾ of the City’s General Fund. “However, we don’t know at this time,” he added. Also, sales and use tax collection lags. For example, sales tax spent on a purchase in March is reported to the Oklahoma Tax Commission in April and remitted to the City of Stillwater in May.
In addition to a possible decline in sales tax, the City is also looking at its electric utility sales. “We rely on profit made from utility usage; if usage is down, so is our revenue. It will be awhile before we know if people are using more or less electricity at home. We do know local manufacturing is slowing down.”
Before the COVID-19 pandemic, the City was in the middle of its annual process to develop the FY21 budget, which begins July 1. The budget will go to city council as prepared but McNickle anticipates that the budget will be amended frequently to reflect what is happening in Stillwater.
“This is a rapidly changing landscape, so we are preparing for worst-case scenarios,” McNickle said. For example, department directors have been asked to look at their FY21 budgets and to make recommendations for a 25% and a 40% reduction in their operation and maintenance budgets.
“Staff has not been instructed to reduce direct services to the public or other impacts to city employees,” he said. “We will review the budget moving forward in case the situation becomes better or worse,” McNickle said.
The council scheduled a public hearing to discuss the City Manager’s proposed operating budget (with a total operating budget of $109,700,000) at the April 20 council meeting. Find more information here: http://stillwater.org/news/view/id/556.
City Council meetings begin at 5:30 p.m. and are broadcast as usual. Residents can watch the meetings live on the City’s Facebook Page (@CityOfStillwater), AT&T U-verse channel 99, Suddenlink channel 14, and the City of Stillwater’s YouTube Live link at youtube.com/c/CityofStillwaterTV/live.
The final adoption vote of the FY21 budget is May 18.
Actions So Far
At the April 13 Stillwater City Council Meeting, Deputy City Manager/CFO Melissa Reames presented actions taken so far by the City of Stillwater Leadership team:
- Staff are practicing social distancing, wearing masks, holding virtual meetings, working alternating shifts, and more.
- Staff are now following stricter purchasing policies, eliminating non-essential expenditures, looking for grants, and federal stimulus programs.
- Staff is looking at budgets for construction projects and capital equipment and considering the feasibility of delaying or cancelling some of those projects.
- City Council/Trustees can direct staff to use reserves, but staff is recommending a wait-and-see approach as more data becomes available.
- Information Technology & Communications:
- Staff is embracing teleworking, videoconferencing, and communicating with the public using social media platforms and a breaking-news page on the City’s website at Stillwater.org.
How to Proceed
“We know that it’s going to take a multitude of plans, actions, cooperation and good old-fashioned elbow grease before we see anything we can call recovery. However, I’m an optimist, so we will just have to take a good, hard look to find effective solutions to this unprecedented situation,” Reames said.
She posed the following key questions and assumptions to City Council:
- When will Stillwater reopen?
- As of April 15, that decision is under discussion.
2. How long will the recovery period be?
- Assumption – less than five years.
3. What factors indicate recovery is achieved?
- Declarations lifted.
- Businesses reopen.
- New businesses begin to open.
- Events such as graduations, weddings, reunions, and funerals resume.
- Sales tax achieves a degree of stability.
4. What factors affect recovery?
- Will OSU students return to Stillwater and when?
- Will events such as the Arts Festival, graduations, athletics, conferences, OSU homecoming, etc., be held on schedule?
- Which businesses survive the downturn?
- How many residents leave Stillwater?
- Did Stillwater get a complete count on the census?
- How much federal stimulus will Stillwater receive?
6. What is the City of Stillwater, both the community and the government organization, doing to adapt?
- Government Organization.
i. Reducing expenditures.
ii. Looking for efficiencies.
iii. Rethinking “we’ve always done it this way.”
iv. Sharpening the saw.
i. Developing partnerships (i.e., pop up grocery stores).
ii. Taking advantage of federal stimulus programs.
iv. As a community, we will be judged on how we handle this crisis.
Our Residents; Our Community
McNickle said, “We know that our residents are facing or will face hardships as this pandemic moves forward. Don’t put off asking for help whether it concerns your mental, physical, or financial wellbeing. The Stillwater Public Library is compiling a list of resources. Call or visit their website. Call the City’s Utility Services and Billing and set up a payment plan if you are having trouble paying your bill. Let’s take care of each other and our community.”
Librarians will be taking information requests and answer your questions via phone (405-372-3633 x8106), email (firstname.lastname@example.org), and Facebook messaging.
Call Utility and Billing Services at 405.742.8245.