Town projects $881K shortfall
The current pandemic and the resulting closures of businesses and restaurants in Farmville is expected to cause a major revenue shortfall for the town. Farmville Town Manager Dr. Scott Davis is projecting the town will see a more than 30% drop in license fees and meal and lodging taxes.
The town council held its monthly work session Wednesday, April 1, broadcasting the meeting live via the town’s Facebook page.
Davis gave council early predictions on the town’s budget and how the ongoing coronavirus pandemic is affecting the municipality. He told councilmembers that from March to June 30, the town would see a major decrease in revenue.
According to Davis, 48% of the town’s revenue is generated from taxes and licenses. He is predicting those figures will be down substantially, causing a more than $800,000 shortfall before the end of the fiscal year.
“I am currently predicting the lodging tax between March and June 30 to be $199,826 or $200,000 less than anticipated,” Davis said. “I am currently predicting the meals tax between March and June 30 to be $681,069 or $681,000 less than anticipated.”
With those projections the town is looking at an $881,000 loss in revenue.
Farmville currently generates lodging revenue from 11 hotels/ motels and food revenue from 62 restaurants, according to documents presented to councilmembers by Davis.
“The approximate amount of $881,000 is just from lodging and meals taxes, which is only an early prediction at this point, because we receive the revenues a month after they are collected by the business.”
Davis says the March meals tax will not be reported or collected by the treasurer until April 20.
According to Davis, the town will continue to evaluate revenues while reducing expenses to only those that are required and necessary to combat the reduction in funds.
Davis said that the town has a contingency fund in the current budget, and an unassigned fund balance is maintained that is traditionally used for one-time purchases or for situations like an emergency.