Finance Committee Minutes 20-04-02APRIL 2, 2020 - FINANCE COMMITTEE MEETING MINUTES PAGE 1 | 3
FINANCE COMMITTEE MEETING MINUTES
THURSDAY, APRIL 2, 2020
SETUP AS A VIRTUAL MEETING VIA ZOOM DUE TO COVID-19 AND TOWN HALL CLOSURE
1. ROLL CALL
Mayor Sarah Smith Hymes called the meeting to order. The time was 6:02 p.m. Present:
Committee Members – Craig Ferraro, Linn Brooks, Markian Feduschak, Steve Coyer, and Dee
Wisor.
Panelists- Chris Romer, Mike Brown
Avon Town Council – Mayor Sarah Smith-Hymes, Councilor Scott Prince
Town Staff - Eric Heil, Charise Bishop, Paul Wisor, Scott Wright, Amy Greer, and Ineke de Jong
2. INITIAL ESTIMATES OF TOWN OF AVON REVENUE IMPACTS
Town Manager Eric Heil gave a presentation about the COVID-19 Public Health Orders’ impact on the
Town of Avon revenues. Mr. Heil explained the Town’s revenue sources which fund operations. Sales
and accommodations taxes account for over 70% of the Town’s operating budget. The Finance
Department conducted an initial analysis determining the impact on revenues, based on the
assumption that non-essential businesses would be closed through May. They projected three
scenarios: a best case, a middle case, and a worse case scenario.
A. Scenario 1 or the best-case scenario would be an almost $1.9 Million revenue shortfall.
B. Scenario 2 or the middle-case scenario would be a $2.5 Million revenue shortfall.
C. Scenario 3 or the worse-case scenario would be an over $3.2 Million revenue shortfall.
D. There will also be revenue shortfalls due to the Recreation Center being closed for an
extended duration.
Steve Coyer inquired if this model accounted for a reduction in property tax. Mr. Heil and the Finance
Department expect property tax revenue to remain steady unless the Town begins to see property
devaluation because of the recession. Councilor Amy Phillips mentioned that Comfort Inn was still
open so that would be a source of accommodations taxes.
3. NATIONAL AND GLOBAL ECONOMIC IMPACT FORECASTS
Mr. Heil cited the McKinsey and Company Report from March 25, 2020 which analyzes a matrix of
economic scenarios. The two scenarios that Mr. Heil presented and were deemed most likely were
Scenario A3, in which the virus is contained and there is a slow recovery, and Scenario A1, in which
the virus continues to spread and there is a long-term recovery. Scenario A3 would result in a -2.4%
reduction in GDP and the economy would recover in Q3 of 2020. Scenario A1 would result in a -2.7%
reduction in GDP and the economy would not recover until Q1 of 2023.
Mr. Heil also cited the S&P Global Economic Outlook which expects a -12.7% reduction in GDP for Q2
of 2020 and a -13.2% reduction in consumer spending. Finally, he cited Vail Resorts economic outlooks
and plans to deal with the $200 Million profit loss. Vail Resorts has reduced salaries by 50% for six
months, reduced capital expenditures by $80 Million, and eliminated June and July dividend payments
to save $140 Million.
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4. OVERVIEW OF FEDERAL AND STATE RELIEF AND STIMULUS
Town Attorney Paul Wisor presented to the Committee about the Federal legislation that has been
passed in the preceding weeks to lessen some of the negative economic impacts that occur because
of COVID-19. He explained the three phases of legislation.
A. Phase I: $8.3 Billion in emergency funding for federal agencies to respond to the pandemic.
B. Phase II: FFCRA which is paid leave for employees. Tax Credits are available to small
businesses abiding by these requirements. Parents that cannot telework while their children’s
schools are closed are entitled to FMLA. They should receive 2/3 of their pay after 10 days of
unpaid leave. This pay should not exceed $10,000. Employers are also responsible for paying
up to 80 hours for each employee that must take time off for COVID-19 related reasons.
C. Phase III: CARES Act, which is direct funding for businesses and individuals, as well as
funding for state and local governments. The Town will not receive any direct funding, but the
State of Colorado will receive $2.2 Billion. There is no requirement for the State to issue any
of those funds to local governments.
D. The Town is expected to receive some grant funds from the $25 Billion that is being allocated
for rural public transit agencies.
E. Unemployment Insurance will be supplemented an extra $600 per week on top of typical
unemployment benefits.
F. The CARES Act provides a loan of up to 2.5 times payroll costs to use for not only payroll, but
also rent, utility, and mortgage interest payments. This loan will be forgiven if companies keep
their labor force employed. This program will be administered to local banks.
Councilor Scott Prince inquired about the timing of payroll costs and loan forgiveness. Mr. Wisor
clarified that loan forgiveness only applies to payroll costs after the date of origination of the loan. If a
company continues to pay their employees until they receive their loan, they will not be reimbursed for
those costs through this program.
G. Economic Injury Disaster Loans are available to employers through the SBA. It can be used
for many of the same things as PPP, but also for debts and inventory. The interest rates are
low and can be repaid over a period of 30 years.
H. The money most likely to have an impact on the community will be the direct cash payments
given to individuals in the form of stimulus checks. Each adult would receive $1,200 and any
adults with children will receive $500 extra per child.
The committee commented/inquired:
A. “How long would it take for people to receive the cash payments?”
B. Could the Town offer some sort of consulting service to assist businesses with these programs?
C. Chris Romer said the Small Business Development Center Business Navigator could be a
helpful one-stop shop resource for businesses.
D. Will this legislation assist seasonal businesses? Mike Brown said that these programs have
calculations for those type of companies.
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E. Are we required to balance our budget? Mr. Heil clarified we cannot deficit spend, but we do
have operating reserves.
F. What are the Town’s payroll expenses and should we consider reducing the workforce?
G. Mayor Smith Hymes commented other mountain communities have been providing relief to
small businesses and would like to discuss that approach. Dee Wisor commented that
Breckenridge is providing loans to local businesses, not grants because grants could result in a
constitutional dilemma
H. Vail Valley Partnership launched a survey on 03/27 to collect data about the impact of COVID-
19 on businesses.
I. Has the Town connected with landlords to see how they are being impacted? Chris Romer
commented there seemed to be two camps of landlords. Those that are being strict about
maintaining that rent is due at the beginning of the month and enforcing their contract, and those
that are trying to work with their tenants. Town Attorney Paul Wisor noted the Governor’s
Executive Order limits the enforcement of foreclosures and evictions during this time and is
encouraging lenders to be flexible.
J. The committee discussed the different options and how the various loans and relief would work.
K. Should we consider an even worse scenario than the ones originally presented?
L. The committee agreed it is important to keep local employees in their homes.
5. UPCOMING MEETING DATES
Town Manager Eric Heil suggested reconvening the Finance Committee in two weeks, on Thursday
April 16, 2020.
6. ADJOURNMENT
Meeting was adjourned at 7:48 P.M.
Respectfully submitted by:
Charise Bishop
General Government Intern