Dunwoody officials are bracing for a hit to the city budget from the loss of tax revenues caused by the coronavirus pandemic shutdowns.
Capital projects could be affected by a 75% drop in hotel/motel tax money and a 25% decrease in special local option sales tax (SPLOST) revenue, though reserves could allow some work to continue. And city staff has already identified $849,000 in potential cuts to general spending, from parks to police to public works.
Assistant City Manager Jay Vinicki presented the estimates to the City Council at its April 27 meeting. Once the real numbers are known, the council will be presented with formal proposals to vote on.
SPLOST funds are restricted to spending on public safety, transportation and “limited general repairs,” according to Vinicki’s presentation. The fiscal year 2020 budget projected SPLOST revenues at $6.8 million. Vinicki said he is preparing for a hypothetical 25% reduction in new revenues, meaning the city could be forced to cut $1.7 million in SPLOST spending.
However, he said that $1.15 million could be comfortably pulled from a planned improvement project at the intersection of Chamblee-Dunwoody Road and Spalding Drive. Vinicki said that project likely would be delayed anyway — along with much of its expenditures — because it involves utility relocations. Utility providers have cut down on crew sizes due to the pandemic, according to Public Works Director Michael Smith.
Vinicki also tentatively proposed several more minor cuts to SPLOST projects including the Winters Chapel multiuse trail, road resurfacing and others.
Several residents during the meeting’s public comment portion expressed the hope that council members use caution until a clearer accounting of SPLOST revenues can be made.
Vinicki said the 25% decrease in sales tax revenue is based on assumptions about pandemic-era losses and an increase later in the year. Actual DeKalb County sales tax revenue figures for March were not yet known, he said.
Hotel/motel tax funds
Vinicki projected a massive decrease in hotel/motel tax revenues. In contrast with the roughly $800,000 officials expected to collect throughout the year before the pandemic, projections now show the city might collect less than $200,000 — a 75% difference — due to the pandemic’s hard hit to the hospitality industry. However, the city has $1.1 million in the hotel/motel tax money account from previous years, so some work may continue, Vinicki said.
Projects funded with the money include an Ashford-Dunwoody Road commuter trail and outdoor lighting for Peachtree Charter Middle School.
While the budget impacts remain unclear, Vinicki’s presentation said, city staff have already cut $849,000, or 3.3% of planned spending.
That includes $200,000 from parks; $123,000 from Public Works projects; $91,000 from the police department for travel, training and other items; $100,000 in budget contingency; elimination of a $56,000 payment into the City Hall sinking fund; $42,000 by eliminating a print edition of the “Dunwoody Digest” promotional magazine; and $278,000 in other departments.
However, Vinicki’s presentation said, the pandemic forced the city to increase some spending as well, including in public safety and information technology.
–Will Woolever with John Ruch