When Salt Lake City Mayor Erin Mendenhall took office this year, the city was looking at a surplus. What a difference a pandemic makes.
A highly contagious virus that has forced businesses to close coupled with a wave of damaging earthquakes means Mendenhall’s administration needed to do some creative rethinking of the proposed budget, which she presented to City Council members in a virtual meeting Tuesday night.
“At the start of the last fiscal year our state as a whole was going on year 10 of an economic expansion, with one of the most diverse economies in the country,” Mendenhall said.
All that economic growth led to a “historic” budget surplus for the city in the last half of the 2020 fiscal year.
“Now, in the midst of a swift change that has overwhelmed our world, we are fortunate to be in a position where we will not only endure, but evolve as a stronger community post-pandemic,” Mendenhall said.
With no known cure for the coronavirus and a vaccine months or years away, predicting the city’s future finances is hard to do. Mendenhall’s office projected the first two quarters of the coming fiscal year, which starts on July 1, by looking at sales tax trends during the pandemic as well as hits to revenue during the 2008 recession. The administration is also taking note of Utah’s COVID-19 Economic Task Force, which expects the state’s economy to be out of the “urgent high risk” phase by mid-June and starting full recovery by mid-October.
With all those factors in mind, the mayor expects revenues to begin returning to normal by the middle of the second quarter.
The recommended budget estimates $1.3 billion in expenditures for the 2021 fiscal year, down by more than one-third from the 2020 budget. The administration projects an 8.9% drop in sales tax revenue due to complications from the pandemic.
Despite economic uncertainty ahead, the mayor said she’s “confident” about avoiding layoffs and pay cuts for city employees, although there will be a hiring freeze until January.
The mayor called northern Utah’s recent magnitude 5.7 earthquake a “wake-up call,” highlighting a need to maintain city-owned buildings, repair roads and fix two bridges damaged by the quake. A total of $10 million is proposed for streets, sidewalks and transportation. Mendenhall also plans to allocate funds to upgrade IT servers in the Public Safety Building, although the budget does not appear to have a specific line item for this expense.
Mendenhall looks to prioritize trail and park projects as well, especially as city residents spend more time outdoors to recreate during periods of social distancing. Planned construction of the Folsom Trail will continue this fall, according to Mendenhall’s presentation, creating a multiuse path connecting the Jordan River Parkway and downtown. Mendenhall has earmarked another $505,000 for trails projects identified in the city’s recent Foothill Trail System Master Plan.
The mayor plans to move ahead with funding a $450,000 planning process for Allen Park, or “Hobbitville," which the city bought for $7.5 million in late March. Mendenhall also intends to make her equity and gentrification plans a priority in the coming year.
“While we’re being pragmatic and judicious, the current crisis has not deterred us from big, bold ideas, and this budget has plenty of them,” Mendenhall said.
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