Manhattan City Commissioners were presented on Tuesday with a less than promising look at revenues impacted by the ongoing coronavirus pandemic.
The city’s anticipating a drop in all 2020 revenues, with sales tax trending down 3 percent year-to-date compared to the previous two years. Assistant City Finance Director Rina Neal highlighted some of the key areas where the city has saved on expenditures in the general fund since the spring, including cuts to travel, parks and recreation, public works and a hiring freeze.
“The total savings and revenue offsets are about $3.5 million, which is about 90 percent of what was proposed in May. So from May until now we have saved about $3.5 million,” she said.
But even with cuts in those key areas, commissioner Wynn Butler says more needs to be done in one particular area.
“The blue line, for general government is not going in the right direction. It looks like all the cuts are being taken out of two places and I don’t understand why general government is going up. There needs to be a harder look at that,” he said.
CARES Act funds have helped offset some of the dips in revenues, but likely won’t be a complete fix. Deputy City Manager Jason Hilgers says the next three months will be vital as the city expects to draw down some of those savings as it projects revenues likely won’t rebound to the level of previous years anytime soon.
“That could be a difference maker and more than likely will be, but the money we’ve received so far from CARES is the $800,000 for the airport and that’s made a $400,000 difference in the other revenue category. That’s why we’re at about 75 percent,” he said.
Mayor Usha Reddi says it’s not a fix by any means and says commissioners will have to approach the next several months with caution.
“The SPARK funds are not a bonus, but that was something unanticipated and it will just cover some of the costs that we already have. It’s not to say we’ll go above and beyond but it’s going to kind of meet us at expectations so we still need to be cautious as we move forward,” she said.
One area that’s trending down and has been for a long time, is in the travel and tourism industry. During Tuesday’s meeting, Manhattan Convention & Visitors Bureau Executive Director Karen Hibbard presented the third quarter report.
Because of the COVID-19 pandemic, meetings and conferences for the most part have dried up. Only one in-person meeting has been held since the end of the first quarter which ended in March. There were more than two dozen meetings held in the first three months of 2020. Hibbard says it’s led to an approximate $800,000 shortfall in revenues.
“For 28 weeks in a row, our hotel occupancy has continued to be downward. Our goal is to move those arrows upward. We are indeed grateful for those small increases we’re seeing in our occupancy. On average, our week-to-week occupancy is down about 24 percent from last year,” she said.
Even with the now completed expansion of the Manhattan Conference Center, Hibbard maintains there is still a lack of confidence among meeting planners to get back to in-person meetings. Just one meeting has been hosted by CVB in Manhattan since the first quarter ended in March.
Commissioners Mark Hatesohl and Wynn Butler both said they believed some factors, such as the city’s mask mandate may be a catalyst for consumers, including meeting planners, choosing other communities for their business. Hibbard says while this has been true of some meeting planners opting not to have meetings in Manhattan, a majority have simply not felt confident in holding in-person meetings out of sheer uncertainty.
“They also don’t want to be that site, that group, that organization that gathered together and then a spike came as a result of it. It’s kind of twofold. I wish I could put a real finger on it and say this is the sole reason. I think the sole reason is that of COVID,” she said.
Hotel occupancy rates year-to-date in Manhattan is at 41.6 percent. Revenues for 2020 are at $10.4 million as a result, compared to $18 million for this same time the previous three years.