City officials confront COVID-19 economic impact

 

By Jessie Wagoner

 

While the full impact of COVID-19 on the McPherson economy will not be known for several months, city commissioners took steps during their meeting Tuesday to address early concerns. 

City officials first held a public hearing and then approved a motion to submit an application for a Community Development Block Grant – Coronavirus (CDBG-CV) funds through the Kansas Department of Commerce to assist in COVID-19 response for affected local businesses. The City of McPherson will request $300,000, which is the maximum allowed. Nick Gregory, city administrator, said many local businesses have reached out to him, expressing their interest in grant funding.

“I had an overwhelming response of potential need for the funds that are out there, available,” Gregory said. “I had 22 different businesses in McPherson reach out to me and tell me that they had potential interest in this and they felt that they might potentially be eligible.”

Gregory explained there are two different types of funding available: funding for businesses that are one to five employees and businesses that have six or more employees. For businesses with one to five employees, there is a potential of $25,000 in funds per employee. For those with six or more employees, funds are available of up to $35,000 with a max of $50,000 per company.

There is approximately $9 million in funds available for the State of Kansas. The funds are earmarked for communities with fewer than 50,000 residents. 

“We have had responses from the retail sector, recreation sector, from the restaurant sector, pharmacy sector, all the way down to personal services hairdressers and things of that nature,” Gregory said. “Based on some of the responses I’ve had, I think we would like to dedicate 75 percent of those funds to those businesses that are one to five in size.”

The commission did receive an update from City Treasurer Johnette Shepek. She provided some options for reducing expenses due to revenue losses caused by COVID-19.

“Revenue losses are estimated to be anywhere from $800,000 up to $1.2 million, depending on the extent,” Shepek said. “That is to the general fund which is a tax levy fund.” 

Options to reduce expenses include:

  • Implementing a hiring freeze
  • Each department reduces hours worked by temporary or seasonal employees by 50 percent.
  • Eliminate transfer of $25,000 to the golf course fund. 
  • Reduce or eliminate overtime budgets for the remainder of the year. 
  • Across-the-board reduction of department budgets by three to five percent. 
  • Deferment of previously budget purchases in the equipment fund. 
  • Not opening the water park. 

Mayor Tom Brown made a motion to reduce expenses for 2020 by not going to the longevity wages this year, implementing savings from the golf course, parks department and cemetery budgets and reducing overtime. The motion also included canceling non-essential training and delaying equipment purchases. The motion was approved.

“Between now and Sept. 1, we will be able to evaluate the property tax and the sales tax,” Brown said. “Right now, maybe we are OK, but we were somewhat down this month, and we don’t know what April is going to be when it is reported in June. The good news is the last unemployment for McPherson County is we are 5.8 percent unemployed. So that is much better than most of the areas around us.” 

In other business the commission: 

  • received an update on road projects. 
  • approved air conditioning repairs for the McPherson trolley. 
  • accepted a $1,000 grant from The Williams Companies on behalf of the fire department. The grant is for COVID-19 responder support for the Haz-Mat team. 
  • approved wages.