Government & COVID-19: Windsor seeks to avoid layoffs, relies on reserves

About this series: BizWest is investigating the effect of the COVID-19 pandemic and resulting economic stress on municipal, county and state governments, including furloughs, layoffs and budgetary deficits. Articles will be published daily on various jurisdictions.

WINDSOR — The guessing game has begun in Windsor, where town government is projecting potentially large reductions in tax revenue resulting from the novel coronavirus pandemic.

“We don’t know,” town administrator Shane Hale said in answer to a question about what the town should expect. “We don’t have a good predictive model.”

The town derives revenue from a number of sources, chief among them sales taxes, development fees and severance taxes. 

“Grocery stores are still full. Online sales are good,” he said. Yet other categories of retail sales are expected to be down and the exact amounts are not yet known. “Things I think are true on Monday are wrong today,” he said.

“Our last quarterly report was for December, January and February. I told Dean [Moyer, director of finance and information services] that this would be the last good report we’d have for a long time.”

To compensate for what is coming, Hale said the town has projected “what if” sales taxes were down 50 percent, development fees were down 40 percent and severance taxes were down 75 percent.

“We need to make sure we’re not overspending and hope revenue is better, so we can bring things back,” Hale said.

Last week, Windsor cancelled the football and soccer seasons, which in addition to cutting expenses also reduced the revenue that normally would come from participation in those sports. 

The town is talking about furloughs of staff. “From a cultural standpoint, we’re not quick to lay people off,” he said. “Do we want to add to the unemployment rolls? Can we hold that line?” he asked. 

Hale said he expects people will have jobs at least through April. Given that rehiring can take a month, if the town anticipates that businesses will reopen in June, it may not want to furlough staff in May. 

The town has reserves; the general fund has about $15 million in reserves. “The only fund we’ve been spending down is the capital fund as the town deals with streets and traffic issues. If we have a slowdown, we’ll see less activity there,” he said.

The bright spot for Windsor has been in new construction, which results in payment of development fees. “We had 35 new [housing] starts in March. A year ago, we had 42 or 43, and last year was our biggest year ever,” he said.

 

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