More than 140 part-time and full-time Flower Mound employees are out of work as the town prepares for an expected major drop in sales tax revenue because of the coronavirus pandemic and subsequent stay-at-home orders.
The town released on Monday a memo from Deputy Town Manager and CFO Debra Wallace about the town’s financial condition, which she said “is very strong.”
At the end of the last fiscal year, the town’s fund reserves was $16.6 million, which would cover 3.27 months of budgeted expenditures — assuming no revenue is coming in and there has been no reduction in expenditures.
But the town has already taken several steps to lower its expenditures. The Community Activity Center, Public Library and Senior Center were each closed almost a month ago, and the town furloughed 77 part-time and seasonal employees who worked in those services. Because schools have been closed since spring break, 56 crossing guards are also out of work. And, since the initial furloughs, 15 full-time positions at the CAC and library were furloughed, according to Wallace’s memo.
All the furloughed employees can receive some money from the Families First Coronavirus Act, and the full-time positions will receive payment for the days remaining in the pay period when they were furloughed. Both groups are also able to use vacation and sick time while furloughed, according to Wallace.
Wallace said she expects the reduction in salary the town has to pay will be basically a wash because of CAC programming and events revenue that was lost because of the closure.
To further save money, the town has also implemented a hiring freeze, except for public safety and critical infrastructure positions. Travel and conferences for the remainder of the fiscal year are canceled, except for mandatory training for certifications and emergency responder training. The total remaining budget for travel and training is $278,000, but that includes some of the mandatory travel and training, so actual savings will be lower than that.
The town will take a financial hit from an expected reduction in sales tax revenue, though it is less dependent on that revenue than other cities in the area. Non-essential businesses have been closed in Flower Mound and the rest of Denton County for weeks — and the closure is expected to last for at least several weeks more — and restaurants have been forced to only offer pickup and delivery options for longer. Wallace said it’s too early to know what the financial impact of the mandate will be for the town. The sales tax revenue amounts of March and April won’t be known until May and June.
Half of the town’s sales tax revenue goes into the General Fund, and the other half is dedicated to Crime District, Fire District, street maintenance and park projects. Sales tax revenue usually makes up about 19% of the General Fund, in contrast to property tax revenue, which makes up 55% of the fund.
The town is still charging late penalties for utility bill customers, as required by town ordinance, but the town has suspended all disconnections for nonpayment until the town returns to business as normal.