City + Citizen News

City Council holds first budget discussion for upcoming fiscal year

Tuesday, May 12

City Council, Staff grapple with potential budget impacts of COVID-19


Spartanburg City Council had its first budget discussion for the upcoming 2020-2021 fiscual year at their meeting on Monday, with a focus on revenue projections and the impact COVID-19 could have on the City's bottom line.


City Manager Chris Story told Council that staff expects the City's general fund revenue to see a decrease in the upcoming fiscal year of more than $1.2 million, falling from more than $42.2 million in 2019-2020 to just under $41 million. In his presentation to Council, Story offered that some major City revenue sources like property taxes are relatively stable during troubling economic times, but others, such as business license fees, are much more likely to see sharp declines.


The biggest impact, however, will likely be felt in the City's Hospitality Tax Fund. The two percent tax on prepared food and beverages sold in the city is expected to take a major hit in the remainder of the current fiscal year, with staff revising previous Hospitality Tax revenue projections downward from $5.7 million to $4.6 million. When it comes to the upcoming fiscal year, much depends on not only on how quickly COVID-19 economic restrictions can be lifted, but whether those restrictions have to be reimposed later due to another surge in infections. Story said that currently staff is projecting next year's Hospitality Tax revenue to come in at around $5.2 million, though the City Manager stressed the high degree of uncertainty in that figure due to uncertainty over the path the COVID-19 pandemic may take.


Council is expected to discuss how revenue projections will impact major City expenditures at their next meeting on May 26.


Also at Monday's meeting, Council voted 7-0 to approve a development agreement for a new mixed-income townhome project on the City's Northside. The three phase project will ultimately total over 135 units and total investment of over $28 million. The result of significant negotiations between the Northside Development Group, the City, and Montgomery Development, the 43 unit first phase will be located on Raindrop and Milan Streets. 


Under the agreement, Montgomery Development will master lease a quarter of the units to the Northside Development Group (NDG) at below market rents. NDG will then lease them to tenants at or below 80 percent of area median income at affordable rents. Additionally, the units subject to the NDG master lease will not be for specific predetermined units, and there will be no difference in physical characteristics of the affordable units in comparison to the market rate units, meaning tenants and visitors will be unaware of which of their neighbors are paying market rents and which are paying restricted rents.


Developments of this type, with a seamless mixed-income management structure has been long been a City goal, and the hope is that this project will perhaps serve as a model for addressing a portion of our affordability challenges in the long term according to City Manager, Chris Story.


For more from Monday's City Council meeting see the full video below and a link to our live tweets from the meeting.



May 11, 2020 City Council meeting live tweets