HALLOWELL — City officials are preparing for the potential loss of revenue due to the coronavirus outbreak and asking department heads to consider cuts in their budgets.

The Finance Committee, made up of City Councilors Maureen Aucoin, Kate Dufour and George Lapointe, met March 26 and Wednesday, discussing the impact of the virus on next fiscal year’s budget and the potential of distributing aid to the city’s small businesses.

On Friday, the CDC reported there are 432 confirmed cases of the coronavirus in Maine and nine people have died. The outbreak has closed businesses, leaving some state residents out of work and causing economic uncertainty.

Hallowell City Manager Nate Rudy speaks Jan. 4 during a City Council retreat at Maple Hill Farm Bed & Breakfast Inn and Conference Center in Hallowell. Kennebec Journal photo by Joe Phelan Buy this Photo

At the March 26 meeting, City Manager Nate Rudy told the Finance Committee that he expected decreases in revenue sharing and excise taxes due to the economic downturn caused by the virus. He said that downturn could also make it more difficult for some city residents to pay their taxes. This fiscal year, 93% of taxes have been paid, leading city officials to anticipate the downturn to affect next year’s budget in a bigger way.

City Councilor George Lapointe, the chairperson of the council’s Finance Committee, said Friday officials have asked department heads for projections keeping in mind “flat funding and a potential 5% reduction” in next fiscal year’s budget, but have not yet decided on set percentage of reduction.

“Very little is known and we will have to wait until we get concrete information,” he said.

In August 2019, the City Council approved a $6.2 million expenditure budget and a $938,755 revenue budget for the current fiscal year. A preliminary budget draft from March showed an 8.58% increase in municipal spending for the 2020-21 fiscal year.

Rudy said Wednesday that he received a memo from state Treasurer Henry Beck saying that there is no way to project where the economy is going during the outbreak.

The first of three readings of the city budget was scheduled for the April 13 City Council meeting. Lapointe said that would not take place due to uncertainty with municipal and school expenses, which he said could increase by more than $220,000, according to March 26 meeting notes.

“There are so many unknowns in the budget from revenue side and Regional School Unit 2 budget on the expense side of the budget,” Lapointe said.

Customarily, the first reading contains a minimally-cut budget with all requests from the city’s department heads. At Wednesday’s Finance Committee meeting, Fire Chief Jim Owens, Police Chief Eric Nason and Public Works Foreman Chris Buck discussed their department budgets.

George Lapointe

At Wednesday’s meeting, Rudy said the city has spent about $1,000 in reaction to the outbreak. He said the city will continue to buy “all the hand sanitizer we can lay hands on.” Buck said his department purchased six signs for $45 each to promote social distancing that will be placed in city public areas.

Buck said he had money in his budget for the signs, but Rudy said some contingency funds could be pulled from the City Clerk’s office for more outbreak-related expenses.

Lapointe said Friday there is no ballpark figure for potential virus-related funding due to the “fluidity of the COVID-19 response.”

The Finance Committee has also discussed relief for local businesses using TIF funds to either give loans or hire a consultant. According to notes from the March 26 Finance Committee meeting, the consultant could identify available sources of assistance and make this information available to Hallowell businesses.

During that meeting, Lapointe said Hallowell businesses did not want loans when the city discussed assistance prior to Water Street reconstruction.

On Friday, he said any project would likely be in partnership with the Hallowell Area Board of Trade. According to March 26 meeting notes, Chris Walsh, a representative from the board of trade, liked the idea of a consultant to help Hallowell businesses.  Lapointe said the Finance Committee has offered to discuss these options further with the board of trade.

Walsh was not available for comment Friday.

According to March 26 meeting notes, Aucoin said she didn’t think a consultant was needed and that funds should go directly to the businesses. She also floated a “TIF funded revolving loan fund” for businesses.

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