Algonquin adopts financial resiliency plan amid COVID-19 crisis
There's no playbook for managing municipal finances amid a global pandemic that threatens an economic downtown, Algonquin Assistant Village Manager Mike Kumbera said. That's why the village is doing its best to create one.
The village board last month adopted a financial resiliency plan that outlines strategies for responding to "trigger events," like the COVID-19 crisis, that could lead to a more than 5% hit to major revenue sources. The budget cuts and other steps taken by the village depend on the duration and overall impact of the adverse fiscal conditions, the plan says.
"It gives us a framework to implement some actions so we can remain financially solvent and viable," Kumbera said. "We are being proactive."
With only preliminary data to work with so far, officials are unsure how drastically the coronavirus pandemic and stay-at-home order will affect the village's bottom line, he said, though "it does look like it'll be substantial."
Staff members have identified about $1.5 million in potential budget reductions for fiscal year 2021 that could help offset a revenue dip. Those line items, presented this week to trustees, account for about 7.4% of planned expenditures, including staff vacancies that could remain open, capital purchases that could be delayed and repairs or upgrades that could be deferred.
Additional budget adjustments could be identified and official action could be taken as the village's economic state becomes clearer, Kumbera said, noting monthly updates will be provided to the village board.
The financial resiliency plan breaks up possible cost-saving measures into three stages based on their effect on village operations and the time frame to realize the benefits. The goal is to carry out the village's mission to deliver core services and maintain vital infrastructure systems, even in times of fiscal stress, Kumbera said.
"The sooner we can have these ideas on the table, the more options we do have down the road," he said.