FOR IMMEDIATE RELEASE
April 13, 2020
The City of Chesterfield has begun furloughing employees due to COVID-19
Due to the revenue losses associated with the COVID 19 Pandemic, the City of Chesterfield has been forced to temporarily furlough a substantial portion of its workforce, across all departments and functions. This is very painful and we're doing what we can to manage what is a catastrophic, but hopefully temporary loss of revenue.
The City of Chesterfield does not assess any property taxes. Residents and business owners pay property taxes to various taxing districts like the School District, the Fire District, Metro Zoo and Museum District, The Metropolitan Sewer District, the Special School District, Sheltered Workshop, and the Library District. But the City of Chesterfield does not have a property tax authorized and does not charge one on our residents or businesses. The City of Chesterfield is dependent primarily on Sales taxes, which make up more than half of our revenues.
With the Stay at home order and closure of businesses, retail and restaurants, those tax dollars will not be forthcoming. While we do not yet know the duration of the event and the ultimate magnitude of the losses, we currently expect losses between $5 and $9 million.
The City collects sales taxes that are designated for specific purposes, such as Police, Parks, and Streets. These funds are allocated for these specific purposes and cannot be used for other activities. For example, the City allocates 100% of the Proposition P (Public Safety) proceeds, (budgeted 2020 revenues $2,670,500) for our Police Department. 100% of that money is directed to the Police and there is absolutely no diversion of that money, whatsoever. We are extremely proud of our Internationally Accredited Police Department and they are afforded great respect and will continue to be provided the resources they need to do their job in the most professional manner possible. The Chesterfield Police Department is the largest municipal Police Department in St. Louis County and the residents and businesses of Chesterfield can be assured that they will continue to provide superior services and patrols.
In fact, the 2020 Police Department budget is $11,552,571, which clearly shows the priority and emphasis our City places on this function. The City General Fund subsidizes the Proposition P funds by almost $9 million. So, not only have we committed ALL of the Proposition P funds, we've supplemented those revenues by more than 332%. Our Police department is the largest in St. Louis County and funded accordingly. They are the best!
While we are making every effort to reduce expenses at this juncture, it should be understood that the COVID 19 Pandemic has resulted in severe temporary reductions in our revenues. We are anticipating tax revenue losses from the current COVID-19 pandemic, of $5 to $9 million dollars in 2020. We have no other option than to aggressively reduce our costs in the near term. Proposition P itself, is based on Sales tax, and we're anticipating up to a 33% drop in those revenues.
We have delayed\deferred unnecessary purchases, have delayed\deferred scheduled capital construction contracts, and all other unnecessary expenses. Even with the millions of dollars of reduced expenditures, we will not be able to "save" enough to cover the revenue shortfall. The City has been very fiscally conservative over the years and has a substantial "fund reserve" set aside. This pandemic will challenge us to and require us to consume a significant portion of that money to cover our losses.
While any furlough is unfortunate, and we hope them to be temporary, every department and functional area will be impacted. We are actively working to minimize the impacts and hope they are of short duration. But we have no choice at this juncture, given the severity of the projected revenue losses. No department or function is exempt from the loss of funding.