Initial tax numbers for March are showing the city of Surprise’s budget didn’t take as much of a hit that month as expected, but officials are still bracing for an unknown April and May.
Surprise Finance Director Andrea Davis told the City Council May 18 that thanks to a good year before the COVID-19 pandemic, as well as savings in personnel and other areas, the city is looking to fill a gap of $300,000 for March.
Restaurants and bars suffered the biggest hit. It’s down 4% or $241,509 under budget projections through March.
“It’s not as bad as we first estimated,” Ms. Davis said. “However, we’re still missing a lot of information.”
That’s because March was only a partial month shutdown. Mayor Skip Hall declared a state of emergency on March 19.
“I think the numbers from March are good,” Ms. Davis said. “We don’t know what April looks like. We’re definitely saving money. However, we always run the risk of we don’t know what we don’t know until it happens.”
The city’s budget has been helped by a strong fiscal year before the pandemic hit.
December brought in $700,000 in sales taxes above what was expected in the budget. A typical month draws in about $450,000.
“Some of that increase that we’re seeing can offset some of the losses that we’re experiencing,” Ms. Davis said.
The city is also seeing savings with the hiring freeze of all non-essential positions and reductions in spending across all departments.
Ms. Davis said through March, the city had saved $3.1 million on personnel costs. Plus, she said original projections to save $4.1 million through June had already been surpassed in the middle of May.
“We’re seeing a lot more on the personnel side than we projected,” Ms. Davis said.
The city had already been seeing a trend in that savings as it had $3 million in vacancy savings last year.
Hotel traffic was down 35% to 40% in early numbers so far. The beginning of the shutdown happened right at the end of the spring training season, which is traditionally the city’s busiest for tourism.
The Finance Department has been giving the council monthly updates and are using the phased-in approach to help the budget weather the storm.
“We still need to be mindful of the governor’s orders and what we’re supposed to be doing, what programs we can and cannot run and also financially,” Ms. Davis said.
The city also ended the last fiscal year with a $6 million savings in the general fund. Ms. Davis said about $2 million of that got programed into the capital fund, which leaves about $4 million that wasn’t factored into this year’s budget.
“So there is some opportunity in that fund balance specifically from savings from last year that we could use if we had the worst-case scenario,” Ms. Davis said.
The budget discussions come at a time when Surprise undertakes a phased-in approach to reopening the city.
“Our residents are clamoring for [reopenings] but at the same time we do have budget concerns,” City Manager Mike Frazier told the City Council May 19. “We know that April is not going to be good at all. May now looks like it’ll be better than it was [expected], and if that continues maybe June will be better.”
June will bring public access to Surprise City Hall, 16000 N. Civic Center Plaza, as well as the reopening of skateparks and club swimming at the Surprise Aquatic Center.
Days after Gov. Doug Ducey’s stay-at-home order ended, Surprise officials May 18 released the newest guidelines for the city.
The city is keeping an eye on federal and state guidelines as they change, while also juggling what it can financially afford to reopen.
“We’re trying to pick activities that make some sense, don’t cost us a lot of money and we can ensure the safety of the participants,” Mr. Frazier said.
The previously announced reopenings of tennis and pickleball courts on May 13 are considered Phase 1 of the reopening. Dog parks and appointments at the Surprise Resource Center, 12425 W. Bell Road, during regular business hours were also part of that reopening.
Part of Phase 2 will take place Monday, June 1, when City Hall reopens for public access and the resumption of club swim practices.
The city’s club swim team has roughly 100 athletes who pay $80 a month to be on the team.
“It never quite pays for itself, but it’s better than no income,” Mr. Frazier said.
The second part of Phase 2 will happen June 8 when water aerobics and lap swimming reopens by appointment. Those programs are also cost-neutral to the city.
“The reason for those is it’s not a crowd of people, distancing is more easy to accommodate, and also on the positive side each of those activities generates revenue for the city,” Mr. Frazier said.
As for open swimming, there’s a possibility it may not happen in 2020 at Surprise Aquatic Center, 15831 N. Bullard Ave., and Hollyhock Pool, 15808 N. Hollyhock St.
The city loses money each season to operate the pools, and it just furloughed hundreds of seasonal and temporary workers, mostly in the Parks and Recreation Department, in late March.
It was scheduled to open for public swimming on Memorial Day weekend.
“If you’re expecting to see open swim, we’re not anywhere near that,” Mr. Frazier said.
Sand volleyball courts and skateparks are also scheduled to reopen as part of Phase 2, but it’s unknown when that will be.
“We’re about to probably open the parks [amenities] with a notice to people that you’re kind of doing this at your own risk,” Mr. Frazier said. “You should make sure that you sanitize and all that when you’re done. Items that are outdoors tend to be a little bit easier because air dissipates.”
Phase 3 of the plan will kick in only when larger group gatherings are OK’d by health officials.
It includes the return of public attendance to City Council and other public meetings. It will also signal the reopening of a series of recreation amenities and programs.
Those include city playgrounds, basketball courts, ramada rentals and splash pads.
The city plans to offer some recreation and special interest classes with limited group sizes in the third phase.
The city’s three libraries could also reopen then, but with reduced hours.
Phase 3 will also allow the resumption of small community events where physical distancing is in place.
When all large gathering advisories are lifted, Surprise plans to enact Phase 4. That will include block parties and other large venue gatherings.
Mr. Hall is still pushing for a 4th of July celebration, which has already been canceled because of the virus amid restrictions on big gatherings.
The mayor asked Mr. Frazier if there was any way an Independence Day celebration could being rescheduled.
“We’re still talking about that one,” Mr. Frazier said. “Most cities are not having gatherings at all.
The Surprise Senior Center, 15832 N. Hollyhock St., can also reopen in Phase 4.
The city offers its full reopening plan at surpriseaz.gov/COVID-19.
Editor’s Note: Jason Stone can be reached at firstname.lastname@example.org.