Fort Worth begins furloughing employees as coronavirus cuts into city budget
Fort Worth will begin furloughing dozens of employees as the city’s tourism revenue continues to collapse from the novel coronavirus outbreak.
The public events budget, which took in more than $43 million last year, is expected to be at $29 million by the end the fiscal year that ends Sept. 30, a 32% drop. The decline is largely attributed to a reduction in hotel tax revenue, as Fort Worth hotel occupancy remains at or below 10%, Deputy City Manager Jay Chapa said. The fund also takes in money from convention center bookings and stall and parking fees at the Will Rogers Memorial Center.
The hit means 79 employees who help run Will Rogers and the convention center will be furloughed through at least July 1, if not through the end of July. Mike Crum, the public works director, informed the employees Tuesday and the furloughs will begin May 16.
This is the first time Fort Worth has had to furlough employees because of the novel coronavirus outbreak. While the city must find $40 million in savings in the general fund as well, other furloughs are not expected, Chapa said.
Those employees will be able to apply for unemployment during that time and the city will continue to provide health care benefits. Chapa said the hope is the employees can return to work by August at the latest.
“We’ve tried to lessen the impact on our employees,” he said. “We want them to come back to work.”
The city has vacancies in other departments, but it’s not always easy or practical to shift employees across city departments, Chapa said.
Some employees will continue to work at the Fort Worth Convention Center in downtown, which is being used as an overflow homeless shelter. A “bare bones crew” will work at the Will Rogers Center, where a mask decontamination station has been set up.
Crum said he worked to delay the furloughs as long as possible.
The federal government provided municipalities with an extra two weeks of sick leave. For several weeks public events employees rotated between working and using the emergency time off, with the hope that the coronavirus shutdown would end, Crum said.
The city must begin looking at ways to trim the public events budget. Along with the furloughs, a more than $3 million plan to rebuild a roof in the Will Rogers complex will be delayed and plans to expand the downtown convention center will be put on hold indefinitely.
The culture and tourism fund has a multi-million dollar debt obligation it must maintain related to the construction of Dickies Arena, the $540 million venue that opened last fall in the Will Rogers complex. Fort Worth is on the hook for about $225 million.
The city recently made a $13 million payment for the arena and Chapa said financing the debt should be secure through at least 2022. By that time the annual payment will increase to about $15 million.
Another $8 million is owed for older projects, including a previous expansion of the convention center.
Crum said it may take two to three years to return tourism revenue to where it was before the outbreak.
The projections for the public events budget are based on a hope that tourism will begin to return to normal by July. Fort Worth is following a three-phased plan outlined by Gov. Greg Abbott that began Friday and would see the economy reopen by then, but the plan is dependent upon cases of the virus remaining low. It’s also unclear if consumer confidence will return that soon.
“It’s a big question mark,” Chapa said.
Mayor Betsy Price said she believed Fort Worth’s budget overall was in a better position that many other large cities, based on conversations she’s had through the National Conference of Mayors.
“There are so many big cities and small ones too, who are heavily, heavily dependent on sales tax in their general fund and they’re really hurting so I’m very proud of our team,” she said.
The city’s general fund is expected to take a $40 million hit from a loss of sales tax revenue, City Manager David Cooke said, but he believes the city can find savings through hiring freezes, project delays and other means. In April the loss was estimated at $32 million.
A special budget for the police department also funded through sales tax will take a $14 million hit, Cooke said.
A hiring freeze through the end of the year will save almost $9 million from the general fund, he said. City departments have cut about $7 million from discretionary spending. The bulk of the savings, about $16.5 million, will come from delaying projects that would normally be paid for in cash.
Council members Ann Zadeh and Cary Moon voiced worry during a council work session Tuesday about delaying the cash projects for too long. These projects usually include improvements to infrastructure, like street repairs, which citizens expect, Zadeh said.
“My concern is we’re not cutting enough expenses,” Moon said.
