Discussing Nevada's financial status amid COVID-19 pandemic

The Nevada Daily Mail sat down with City of Nevada Treasurer Kristie Modlin and Interim City Manager Mark Mitchell Thursday to discuss the city's financials. With the COVID-19 (coronavirus 2019) global pandemic altering the way the city and local businesses operate and conducts business, the effects of the economic shift on the city's funds were discussed.

“The most significant effect was the parks fund because of the user fees and if people can't participate, then there's no money coming in,” stated Modlin. “So, they're relying on the sales tax alone — which we did dial back the operation side of things, but we're still going to be at a loss.”

The City of Nevada had recently announced that the Walton Aquatic Center would remain closed this summer, due to the COVID-19 pandemic. “It does operate at a loss, but that wasn't the reason we made that decision,” noted Modlin. “We made that decision for safety issues. The loss is about $150,000 a year when we're open. And the sales tax subsidizes that — user fees do not cover any of the things that we do in parks. It's just a minimal contribution to the expense.

To this, Mitchell added, “The chemicals and water when we fill up that pool, we're automatically $65,000 in the hole.” Mitchell went on to note the reasoning behind the closure. “I'll echo what Kristie says: The real reason we closed the pool was having our youth staff trying to enforce the CDC (Center for Disease Control) requirements of social distancing and separation and limited occupancy requirements by the state. That ties back into the financials. Limiting occupancy would make our revenues go down.” Although the aquatic center will be closed, this will not significantly help the City's financials due to the cost of maintainance and upkeep. “We still have those ancillary costs that we have to pay. The infrastructure still has to be maintained and there's various services that we can't just cancel. There's a small savings because we're not paying for labor out there," stated Modlin.

When asked whether the City of Nevada will receive any federal funding to help offset any financial loss due to COVID-19, Modlin stated, “We have received CARES Act funding for the public transportation program. We were allocated $77,000 which is really good. We're able to offer free rides right now because of that. We're also looking at updating some of the service hours as well going forward. We have our regular grant money that we get through Section 5311, and then on top of that we have the CARES Act money. That is the only funding that we know for sure of — there is something through the county that we are in the process of applying for.” On April 28, Vernon County received information and guidance from the office of the Missouri State Treasurer regarding the distribution of CARES Act funds from the State of Missouri to Vernon County. After approving and returning a certification for payment to the State of Missouri on May 5, Vernon County received $2,412,450 on May 6. With this, local governments will be eligible to submit an application for the first round of funding.

“There is a big disconnect in municipalities because the CARES Act is not assisting municipalities,” noted Mitchell. “There's a huge movement — we're writing letters to our Congressmen and legislators at the D.C. level because we're left out. There's a big movement to try to capture some of that money because of budget shortfalls. Currently, right now, there's nothing in place.”

“I've heard a lot of talk about the sales tax,” added Modlin. She went on to state that people are worried that the sales tax is going to take a dive. “We've been looking at that,” she continued. “People are spending in a different way than they were before. I feel like Nevada is unique compared to Joplin or a town near Kansas City because they draw people like us from small towns to go shopping there. And then when everything closed down, we started shopping locally or Amazon. I did go back and I looked at our sales taxes from 2008 — when the stock market crashed — and there was a 2 percent decline. Within two years, the sales tax level was back up to where it was originally. Right now, our sales taxes are actually up just a little bit over where they were this same time last year. That's because there is a lag, so everybody was doing their frenzy buying and now we're reaping the benefits of that. If I see a decline, it's probably not going to happen until July or August. I'm not anticipating a really large decline.” Modlin stated that she didn't think the decline would be as bad as 2008. “I could be wrong, but I'm comfortable with the way things are going right now because we do have reserves. We worked to maintain those reserves for things that we don't anticipate, like this. The only real big issue right now is the parks fund and keeping that going.”

“I'll echo what Kristie said,” stated Mitchell. “We've looked really hard at the budget and we've even delayed some equipment purchases. We have not filled some vacancies for employment. We are very fortunate that we had no furlough or lay-offs of city employees. We did, during this time, lay-off our part-time employees so they could benefit from the unemployment, but we have most of those back. What we have open is the golf course and that's really what we have that will bring revenue. So, we're really putting a lot of effort into that. I want to publicly thank the Golf Committee — they've helped us a lot in assistance with getting the course back up to shape. They're going to help us in promotions and trying to build the reputation of the course back up. We are putting a lot of effort into that.”