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Finance Director: Pandemic ‘Impacting’ County’s Budget

MADERA — The Madera County Board of Supervisors heard some sobering statistics this week about how COVID-19 is impacting County coffers.

Joel Bugay, the County’s finance director, told supervisors at their Tuesday meeting that the pandemic will have “both short- and long-term financial impacts” for Madera County.

“Revenue we had counted on potentially will not materialize,” Bugay said.

At Tuesday’s meeting, with the majority of supervisors participating via teleconferencing in order to comply with social distancing directives, Bugay briefed the board on the latest projections, which include, the finance director said, “a $1.2 million structural deficit” created by the fallout from the outbreak as well as a projected loss of $459,000 in interest income the County was expecting to receive during the current 2019-2020 fiscal year.

Bugay, who is also the deputy county administrative officer, pegged the current total projected revenue losses due to COVID-19 at $3.94 million. That  figure includes a projected loss of $386,000 in County sales tax and $1.1 million in lost transient occupancy tax (TOT) revenues given the occupancy rate at hotels and motels across the county has plunged to single digits since the pandemic began.

“The County received a total of $6,000 in TOT during March,” Bugay reported. “And April, May and June [TOT receipts]” are like to “be close to minimal,” he added.

“It would be premature to say we have a handle on all of this yet,” Bugay told supervisors. “Our hope right now is that the collective stimulus [from the federal government] will allow people to pay bills on time and allow services to keep going.”

Madera County Treasurer-Tax Collector Tracy Kennedy also briefly addressed supervisors at yesterday’s meeting, reporting that her office at the Government Center remains open “on a limited basis.”

“We’re still there doing what we’re supposed to be doing,” Kennedy said. “I have to give my people kudos.”

April 10 is the deadline for payment of the second installment of secured property taxes and Kennedy said county residents who are coming in to pay their taxes in cash are being escorted “one by one” to a secured part of the office by a department employee.

Kennedy encouraged residents who must pay property tax bills this week to take advantage of the option provided by the County of paying by check over the phone.

“It’s easy, safe and free,” Kennedy said.

The department’s pay by check phone number is (877) 399-1067.

For his part, Bugay recommended steps “be taken immediately” by the County to protect itself from even steeper COVID-19 financial losses.

Salary expenses for many County employees will be increasing in 2020. Bugay said that since employees are staying in their positions longr, they are rising on the County’s pay scale. In 2020, the County is expecting to pay an additional $726,000 to workers related to a 3 percent COLA (Cost of Living Allowance) increase that took effect January 1.

The finance director recommended what he called “a measured approach” to cost control going forward, at least until the pandemic ends.

Among his suggestions for the board to consider:

  • Implementing hiring “controls” rather than “freezes” which hopefully will allow the County to avoid large-scale layoffs like the ones that had to be implemented in 2008 at the start of the Great Recession.
  • Delaying a “fourth round” of Fire Apparatus purchases until 2021.
  • Developing a 5 percent “discretionary spending reduction plan” where possible.
  • Limiting future discretionary spending to “no more than [Fiscal Year] 2019-2020 levels.”

Bugay projected that it would be at least the second half of 2020 before officials can more accurately gauge the impact of the pandemic on the County’s finances.

“The idea is for us to work with departments now” in terms of work-force related budgeting going forward, Bugay told supervisors. “We’re in lock-step with Human Resources in terms of these initiatives.”

Board Chairman David Rogers agreed with Bugay. “We’re going to have to be prudent,” he said. “It never hurts to be conservative.”

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