BUCHANAN – A nearly $74,000 budget shortfall is forcing officials here to consider sharply scaling back on unnecessary spending and moving ahead on revenue generating projects that’ve been on hold, Town Council decided during its Sept. 8 work session.
During the budget review, Town Manager Jason Tyree outlined the town’s grim finances, showing how hard COVID-19 impacted the town’s General Fund revenue and expenditures after several summer events were canceled. From July 1 to Sept. 31, the town spent more than $157,577 from its general revenue funds, while bringing in a mere $83,682, leaving a $73,949 deficit. Tyree said the deficit could shrink after the town receives approximately $12,000 in sales tax funding and an estimated $10,000 of the CARES Act from the county within the next few weeks. Tyree advised council CARES Act funding must be used for COVID-related expenses, not to shore up budget or tax shortfalls after several members spoke of using the funds to decrease the deficit during the last fiscal quarter.
“No, the numbers do not look good three months into [the town’s fiscal year] anyway you see it,” said Vice Mayor James Manspile.
Mayor Craig Bryant said forthcoming CARES Act and sales tax funds should not ease council’s fiscals concerns until the monies are in Buchanan’s bank account. A 10 percent budget cut was approved by council last year, he said, to practice fiscal responsibility and to avoid situations like their current one. “We cannot run a budget in the red,” he said, before asking what happened.
Tyree explained that normally, the events bring in tens of thousands of dollars during the three months between July 1 and Sept. 31. On average the town grosses $68,000 yearly for its annual Community Carnival; however, last year revenue increased to $74,000. All other events bring in another $50,000.
COVID-19 also impacted other tax collecting activities. Tyree informed council that Meals Tax revenue was down about $5,000, after eating establishments in town fell from 11 to 9 during the recording period.
The Occupancy Tax did increase slightly, despite two lodging establishments – Railcar Inn and Just Below Purgatory – haven’t had rentals since COVID-19 basically forced the tourism industry to shutter.
In response to the general revenue fund’s deep deficit, the mayor suggested the town hold off on unneeded spending. During a work session, no action on town matters can be taken. One expense that was put on hold during last week’s meeting was hiring a consultant for the town’s water and sewer operations. “I don’t see where we got the money to spend it right now,” said the vice mayor.
Throughout the work session, council agreed the impact of COVID-19 will force them to look at alternative revenue streams. Tourism and visitors will remain the cornerstone of the town’s revenue, meaning the town must invest in new sites and attractions to draw tourists and their dollars in. Council spoke about finally displaying the LOVE statue which has been in storage for years and creating a quasi-RV park near the James River with water and sewage hookups.
Nearly 45 minutes of the two-plus hour meeting was spent discussing restarting work on the historic Buchanan Gauge Dock project. Last year, the project was frozen, because of the town’s finances.
According to the town’s website, “For years the Town has tossed around the idea of exploring the buried gauge dock located under the Town Park on Lowe Street. The gauge dock had become a forgotten relic of the James River & Kanawha Canal when it was buried in the mid-1900s.”
The website states representatives from Buchanan, Botetourt County and an engineering firm met with the Army Corp of Engineering and the Virginia Department of Environmental Quality to discuss necessary permits needed for the site. Permits were not needed, the website states.
Members discussed what type of markers to use in the area, placing a historical kiosk at the site and legal liabilities.
More will be discussed at the Nov. 9 Buchanan Town Council meeting.