Less than three weeks before the start of the next fiscal year, the Town of Purcellville has adopted a budget that accounts solely for the next three months.
The Town Council on Tuesday night voted unanimously to adopt a $4.8 million Fiscal Year 2021 First Quarter Operating Budget that covers town finances between July 1 and Sept. 30. That budget also includes a nearly $300,000 Capital Improvement Program for the first quarter of FY21. The adoption of such a short-term budget is a response to a drop in expected revenues caused by the coronavirus crisis and subsequent business closures.
The council will need to discuss and adopt a separate budget that accounts for the second through fourth quarters of Fiscal Year 2021 before Oct. 1.
While Virginia law requires municipalities to adopt budgets that cover expenditures and revenues for the entire fiscal year, Town Attorney Sally Hankins said she felt Purcellville’s first quarter budget “meets all of the intents of the statute, which is to plan ahead.”
“We will be doing that as soon as this budget is adopted,” she said.
Hankins added that adopting a first quarter budget could be viewed as adopting a new budget late, which she said, many localities have done and have suffered no consequences.
The council Tuesday night also voted to approve a budget appropriation that allows the town to transfer Capital Improvement Program funding that went unused in FY20 to FY21—$7.3 million in General Fund projects, $1.7 million in Water Fund projects, $1 million in Sewer Fund projects and $44,000 in Parks and Recreation Fund projects.
In the first quarter of the new fiscal year, the town will pull about $200,000 to use on General Fund projects, $75,000 for Parks and Recreation Fund projects and $25,000 for Water Fund projects. It will perform no Sewer Fund projects in that first quarter.
That appropriation also allows the town to allocate about $567,000 that went unused in FY20 for seven governmental and utility projects in FY21.
Mekarski presented his original $20.2 million proposed FY21 operating budget on March 18. Three weeks later, once the coronavirus crisis had taken hold of the nation and forced state-mandated business closures, Mekarski presented an amended proposed operating budget that was down by about $1.2 million—to $19 million—to account for a $480,000 expected drop in meals tax revenue, a $300,000 expected drop in real estate tax revenue, a $75,000 expected drop in the special tax district revenue and the elimination of a $305,000 transfer from the General Fund to the Sewer Fund.
Town leaders expect to account for the $160,000 drop in sewer usage fee revenue and the $116,000 drop in water usage fee revenue in the new fiscal year through the use of reserve funds.