So far the town of Flower Mound appears to have avoided a major financial hit from the COVID-19 pandemic.
Debra Wallace, the town’s deputy town manager and chief financial officer, told the Town Council on Monday that the town is projected to end the year with $3.1 million in less revenue town-wide because of the pandemic. But she said $3.7 million in savings has been identified to offset it.
Officials said the $3.1 million drop is better than what many other municipalities are facing, and Town Manager Jimmy Stathatos said there are several reasons why.
“For one thing, we’re not as dependent on sales tax as a lot of other cities are,” Stathatos said after the meeting. “So that helps.”
Still, sales tax came through. He said that's because of the types of businesses that remained operational during the shutdown.
“When people sheltered in place, places like Home Depot and Lowe’s were thriving,” Stathatos said. “And we have one of each.”
Stathatos said the town’s e-commerce companies, such as Wayfair, Owens and Minor, and Custom Ink were also able to continue producing during the shutdown.
“They generate a lot of sales tax,” Stathatos said.
He said while most cities have this option, alcohol-to-go during the shutdown was helpful in bringing in sales tax, too.
Wallace said the majority of that $3.7 million in savings – approximately $2 million – came from salaries and benefits by not filling vacant positions. She said public safety was not included in that.
She said there was approximately $700,000 identified from funds various departments did not spend.
Approximately $500,000 came from furloughs and by canceling summer camps, thus not having to pay summer part-time employees.
Event cancellations led to a savings of $260,000, and the elimination of travel and training saved $235,000.
Wallace said the town will also receive $2.2 million in CARES Act funding, which helps offset public safety salary funds. Part of the money will go to economic development grants the county is disbursing.
Some of the $2.2 million will count toward this year’s budget, while another portion will be factored into 2020-21.
“It will make us more than whole for this fiscal year, and the rest of it will go toward offsetting COVID-related expenditures for the next fiscal year,” Stathatos said.
Wallace said the sales tax numbers the town received in July from May sales was 6.42 percent less than the same time period from the prior year, but it was better than the 15 percent drop she had projected.
Cumulative for the fiscal year, October of 2019 to July, the town has collected just 0.4 percent less in sales tax than the same time period last year.
“So it’s not as bad as we thought it would be,” Wallace said.
Looking ahead at sales tax numbers for the end of the year, and being conservative, Wallace said, “Our projections are about 7 percent for the end of the year, which is a shortage of about $1.8 million.”
She’s also projecting the town to have 7 percent less in sales tax revenue for June, and those numbers come out in August. “Maybe we’ll be below my projection again,” she said.
Town leaders said considering how much COVID-19 has impacted other municipalities, they’ll take those numbers.
“Flower Mound is very blessed with these numbers,” Dixon said. “There are a lot of municipalities that would love to be in our situation.”