Monday, September 21, 2020

Financial Management in Times of Crisis

The quietness of Southlake Town Square is unsettling as shoppers and workers stay at home to ride out the coronavirus threat.  A once busy mecca for shopping and dining, stores and offices are now dark, and restaurants only serve the occasional curbside customer.  Although she doesn’t doubt that the energy will return to the Square and other areas of the City’s economy, Southlake’s Chief Financial Officer, Sharen Jackson, understands that the fiscal situation has changed significantly and is already taking steps to ensure that the City’s financial position is not compromised by the challenging situation.

“When the situation started to unfold, we took immediate steps to alter our spending,” Jackson said. “Initially, we froze hiring, halted certain capital projects, and eliminated travel.”

Since then, City staff has taken additional steps to cut costs and plan for a somewhat uncertain future. Most recently, 150 part-time employees were furloughed. Most of these employees were providing recreation services at Legends Hall and Champions Club.

“Staff has been working to make strategic decisions about how to prudently move forward in the changed economy,” said Mayor Laura Hill. “The City Manager plans to soon bring a budget amendment and other financial recommendations for Council consideration.”

The budget amendment will reflect reduced revenue projections, and any needed changes to planned spending for capital projects, operations, and personnel to maintain financial integrity for FY 2020.

“We are going to need to reconsider our multi-year perspective and consider how our choices could affect our AAA bond rating,” said Shawn McCaskill, Mayor Pro Tem. “New circumstances dictate a reconsideration of our priorities. For example, this is probably not the time to move forward with the much-discussed bond program for open space. Some important initiatives are probably just going to have to wait.”

In addition to retooling the City’s financial plans, staff is also working to identify eligibility for federal or state funding and potential tools for helping the community get back on its feet.

“I’ve asked Councilmembers McCaskill and Huffman to oversee our recovery effort,” said Mayor Hill. “It’s too early to know exactly what form it will take, but we’re open to considering anything that will restore Southlake to its pre-virus form.”

Deputy Mayor Pro Tem John Huffman agrees. “We’ve already started connecting local businesses to resources that may make a real difference for them. We’re committed to doing what we can to help with finances, regulations, or other challenges so that our community comes out of this experience stronger.”

For Jackson, the challenge exists but isn’t insurmountable. “We’ve always planned conservatively. That will serve us well in this moment as we reconsider our approach.”

Although many operational steps are already being taken to limit spending, Mayor Hill expects the formal budget discussions to occur in late May or early June.

“The Council has always done an excellent job of working with staff to manage the City’s finances, and we’ll continue to do so. We’ll be taking the same approach we always have, carefully balancing the desire for excellent service with taxpayer interests,” she said.