Page 6 - FY 2009 Proposed Budget

Manager’s Message
Table of Contents

INTRODUCTION

Restructuring the Present, Preparing for the Future
The City is facing challenges in FY 2021 that are without precedent. The public health concerns created by the COVID-19
pandemic have not yet been resolved, and coronavirus cases are still increasing across the country and throughout Texas. The
economic impact of the pandemic is far from over; many cities and states have been forced to slow or even reverse their
business reopening plans, resulting in substantial revenue declines for state and local governments.

When FY 2020 began, the City was well-positioned to benefit from the steady revenue growth it had experienced over several
years since the end of the Great Recession. By January, our revenues were tracking very close to the adopted budget levels;
st
the 1 Quarter BAR showed property taxes, sales taxes, and franchise fees at $407,000 better than budget in the aggregate,
and the General Fund’s expected revenues were projected to be $347,000 higher than budget. The City was also anticipating
the April opening of Globe Life Field, the new home of the Texas Rangers.

The pandemic brought a significant financial downturn almost overnight. By March and April, the City’s sales tax revenues were
projected to fall short of budget for the year by as much as 20%, and all revenues related to entertainment, hospitality, new
development, and construction were at risk. For a city that receives an estimated 52% of its sales tax dollars from visitors, the
prospect of fewer visitors created additional financial challenges. And the suddenness with which the downturn occurred was
unparalleled; the outlook for sales and hotel occupancy tax revenues declined so quickly that traditional revenue projection
models lost much of their predictive value.

The resulting unemployment from business closures has been particularly painful. While the City of Arlington and the state of
Texas continue to have unemployment figures that are better than the national averages, unemployment is still far higher than
the levels seen prior to the pandemic. The most recent data shows June unemployment at 9.4% for Arlington, 8.9% for Texas,
and 11.6% for the nation, all of which are higher than the peak unemployment figures reached during the recession. (Sources:
Texas Labor Market Information and US Bureau of Labor Statistics.) Most economic projections call for unemployment rates to
remain at elevated levels well into 2021 and perhaps beyond.

In this environment, the City has managed its budget in the same way citizens and businesses confronting these challenges
would operate. As revenues decline, the focus shifts to preserving essential services while finding ways to reduce expenditures
wherever possible. I believe we have developed revenue projections for the remainder of FY 2020 that are realistic but
conservative; these projections will allow us to program our remaining expenditures this year to stay within those revenue
constraints.

The challenge for FY 2021 lies in predicting the speed and extent of economic recovery, as well as the level of federal assistance.
Despite the uncertainty, and the likelihood of revenues remaining well below normal expectations, the City has several
commitments that will be addressed during the year. New recreation centers will be opening that require additional staffing and
operating costs. The City Council has expressed strong support for enhancing the City’s mobility through pilot expansion of the
VIA Program to cover as much of the City as possible. The federal Coronavirus Aid, Relief, and Economic Security (CARES)
Act will provide approximately $11 million over the next two years to be apportioned between the City’s transit programs, VIA
and Handitran.

Responding to Issues of Social Equity

Our efforts to promote inclusion and expand opportunities for all our citizens include the activities of the Unity Council,
established in July 2020 to gather community input on strategies to build and promote greater equality throughout the City,
and to “create an exemplary, safe environment in which to live, learn, work and play for all residents — regardless of race,
ethnicity or national origins.” The City continues its commitment to expanding opportunities for Minority and Women-Owned
Business Enterprises (MWBE) to conduct business with the City through procurement contracting by encouraging full
participation in all phases of the procurement process. Bid solicitations require vendors to list any/all subcontracting activities

2021 Adopted Budget and Business Plan iii City of Arlington, Texas