AUSTIN (KXAN) – Facing economic projections that include tens of millions in revenue losses, the city plans to tap into emergency funds.
Austin’s Emergency Reserve Fund is being tapped into for the first time ever, Deputy Chief Financial Officer Ed Van Eenoo said Tuesday.
The reserves are allocated as 6% of the general fund.
Austin’s general fund this year is $1.1 billion, so the fund would have close to $66 million.
City Council is expected to approve the first expenditures on Thursday, a total of $17.8 million.
That includes $2.8 million for a lease agreement to use the Crowne Plaza as a quarantine facility and $15 million for support services and direct financial assistance to residents impacted by the coronavirus pandemic.
The Austin area is projected to lose an estimated 261,275 jobs due to COVID-19, according to a report by TXP Economic Strategists presented before Austin City Council’s work session Tuesday.
Analyst Jon Hockenyos with TXP Economic Strategists told city council members the largest blows will be to the foodservice industry, which is projected to lose 88,418 or 81% of its jobs. More than half of sales jobs in the Austin area could also be lost. The city says Hockenyos is an analyst the city uses regularly.
In the projections Hockenyos presented, he told the council that it is not until July or August that the broader local economy is expected to start back up. He also noted that the city is having a downturn in lodging tax revenues.
Hockenyos noted that another challenge is that many banks, locally and around the country, are so overwhelmed with applicants for SBA loans that they are only processing applications from existing customers.
“It’s probably a two-year process to get back to whatever normal looks like,” he told city leaders.
Austin is also projecting budget shortfalls between $38.3 million and $57.6 million this year, due to the coronavirus.
For perspective, the city spent a record $62.7 million dollars on budget related to initiatives on homelessness this year of its entire $4.2 billion budget.
Currently, the City of Austin is scheduled to finalize budget discussions for the 2021 Fiscal Year in August of 2020.