Myrtle Beach leaders discuss challenges in crafting $193 million budget amid coronavirus
Myrtle Beach’s proposed budget for 2021 doesn’t call for a property tax hike, but could result in possible layoffs or pay reductions for city employees if the city doesn’t adequately recoup funds lost during the coronavirus pandemic.
The city’s proposed $193.2 million budget is about a $8.2 million, or a 4.1 percent, decrease over the previous year. Currently, no increases are being proposed on property taxes, storm water, water and sewer, recreation, sports tourism and on the Myrtle Beach Convention Center.
However, with a $10.9 million, or 13.3 percent, decrease in tourism and business-driven revenues, city officials are being advised to remain flexible as they monitor future spending and returns. Currently, the proposed budget calls for a reduction in overtime across all departments, along with a suspension placed on holiday bonuses and salary increases.
Additionally, there will be a delay in filling current vacancies, a limit on capital expenditures, a hold on capital projects, and a halt on fleet replacement.
“We’ve been engaged in nothing but reacting to this crisis for the last several months and the thinking has been all short-term,” City Manager John Pedersen said during Thursday’s monthly City Council workshop meeting. “In the long-run, this is a good budget given where we are today but a lot isn’t sustainable; we are going to have to make changes, some fundamental changes.”
If revenues are impacted to a greater degree than expected, city employees could face furloughs, layoffs or pay reductions, officials said. Despite the impacts of the pandemic, the city hasn’t been forced to furlough any full-time workers, unlike North Myrtle Beach and Surfside Beach.
Mayor Brenda Bethune also suggested council members consider analyzing their own budgets, travel expenses and allowances to see what could be cut or reduced to make up for the shortfall.
“Our body, this council, needs to look at some things also. Traveling for conferences, we may need to take a year off from that, looking at car allowances,” Bethune said. “I think we need to be willing to look at all of the things we have control over to add to what the rest of the departments and what the rest of the staff are doing.”
To further secure the city’s bottom line in creating the newly proposed budget, each department was tasked with implementing cuts and reductions in March in an effort to revise and lessen the 2020 budget. Some revisions included enacting a temporary hiring freeze, utilizing existing full-time staff to cover services in lieu of hiring part-time or temporary employees, and reducing capital spending and materials cost.
Officials said the hiring freeze and the delay on filling current vacancies has saved the city $750,000.
Furthermore, the reduction in capital spending and operational management has resulted in roughly $1.8 million in savings, meaning all capital projects will be halted. The retirement health insurance fund has also be changed to net $2.9 million back to the city, officials said. Additionally, changes were made to some non-essential city services provided.
In the event revenues aren’t severely impacted following the budget’s passage, the city will consider lifting current suspensions noted in the proposed budget.
Despite the short-term savings, Chief Financial Officer Mike Shelton said that accurate predictions for the remainder of the year considering revenue in accommodations and hospitality can’t be made right now with hurricane season underway, the potential risk of a second wave in coronavirus cases and the uncertainty when it comes to recovering from the pandemic.
While city leaders are advised to maintain flexibility, sustain essential services to the community and visitors, and ensure the city’s fiscal health with the current budget, Shelton noted that he doesn’t anticipate the city will fully recover from the damage caused by COVID-19 until the end of 2021.
“We certainly haven’t had a budget experience like this before,” Shelton said. “The challenge is here is that no one seems to have a great idea of what to expect.”
The proposed budget will be subject to two readings upon approval. The new budget must be approved by July 1, the start of the new fiscal year. A public hearing will be held on June 23.
