The City of Indianola could experience a serious financial hit as a result of the Coronavirus.
At Monday’s Board of Aldermen meeting, Mayor Steve Rosenthal shared information obtained during a two-hour meeting with the state auditor, the state economist, the head of the municipal clerk's association and a representative from the John C. Stennis Institute of Education and Government.
Rosenthal said the group is forecasting at least a 10 percent reduction in the annual sales tax revenue, but admits that for some municipalities it could possibly be 20 percent or 30 percent. “They're saying that your best scenario is that you will only have a 10 percent drop,” he said.
Rosenthal said the committee is recommending that state municipalities re-analyze their budgets. "Their forecast was not gloom and doom, but they said everybody should re-analyze their budget and possibly reduce some capital expenditures if they could." Based on that recommendation, Rosenthal said he has issued a moratorium on spending for the city. Any purchase order over $500 must be approved by him.
He mentioned variables used in analyzing the various communities, which included where the money comes from and a breakdown of the sales tax categories. He said a reduction in the city’s accommodation and food service tax could account for a 20 percent reduction in sales tax income. Rosenthal said that is the second largest income category for Indianola and as of February 29 it had already generated $127,000 and retail trade had generated $556,000 of the city’s budgeted $1.8 million sales tax income, which included a five percent increase from the previous year.
“We would have exceeded that prior to this,” Rosenthal said, “but our March sales tax revenue was down $25,000. We expect to see a much larger drop in April,” he said.
Rosenthal said even a 10 percent decrease in retail sales tax revenue would result in a $180,000 reduction in the budgeted revenue. “We are forecasting a return, but not a quick return. They're figuring at least six months to get back to the volume previously done,” he added.
Rosenthal said he is hoping Indianola will experience no more than a 15 percent drop by the end of the year. "We had almost three full weeks where other than Walmart there was no retail being done."
Rosenthal expressed his concern at the current state of affairs and asserted that each member of the board should be concerned also.
In other business,
Alderman Ruben Woods proposed a deviation in a current city ordinance and asked that public works employees begin collecting the debris from fallen trees due to recent storms. Woods said that even though he is aware of some illegal dumping, he would like to see the public works department clean up the debris during tornado season.
At the request of Alderman Sam Brock, they also discussed the need for methods to notify the public in the event that their water has to be turned off due to a major leak such as the one experienced near the police department last week.
They discussed implementing an Indianola app that would send out push notices, but decided to hold off on that until the new budget year. For the time being, they plan to use the PA system installed in the fire department trucks, post on the police department’s Facebook page and submit public notices to WNLA-AM 1380 Gospel radio station.
A decision on striping and adding median lines to several city streets was tabled after it was determined that the project had an estimated cost of around $41,468. “At this date and time our citizens would be in an uprising if we spent $41,000 to stripe a city street rather than fix city streets,” Rosenthal said.
The aldermen were also reminded that they are to submit a list of at least three city streets that they think should be prioritized for mopping and cleaning before the next scheduled meeting. So far, Brock and Alderman Gary Fratesi are the only ones who have submitted their list according to Rosenthal.
