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Sandy Journal

How will the coronavirus impact Sandy City’s upcoming budget?

Apr 27, 2020 02:48PM ● By Justin Adams

It’s hard enough to put together a budget for a city as large as Sandy when there’s not a global pandemic to consider. (Justin Adams/City Journals)

By Justin Adams | [email protected]

Examples of the coronavirus’ impact in Sandy are plentiful and apparent, from empty parking lots to even emptier toilet paper aisles at the grocery store. Many Sandy residents have had to adjust their household budgets as they deal with lost jobs and closed businesses. The same is true for Sandy City.

By state law, city governments must finalize the budget for the next fiscal year by June. Putting together that budget is a process that takes several months and countless hours of work. And that’s if you don’t throw a global pandemic-shaped wrench into the mix halfway through. Needless to say, that makes the process even more complicated.

Wanting to know how the budget is coming along for the city, the Sandy Journal reached out to the city with a list of questions, which Finance Director Brian Kelley was kind enough to take time out of his schedule to answer. (Answers are edited for brevity.)

Q:  How does a situation like this impact the budget planning process?

A: We had our revenue projections complete and were in the final stages of evaluating expenditures for the mayor’s proposed budget at the time this event became really serious to our country and state. This caused us to perform new research and analysis on economic impacts and trends across the world and in the US. which resulted in several more scenarios and iterations of our projected revenues.

Q: Has the city already seen an impact to revenue from decreased sales tax collection?

A: There is a two-month lag from when it is collected to when cities receive it from the State Tax Commission. We have not received our first month of impacted sales tax. We expect this by the end of May, for the sales tax collected in March.

Q: How much does the city project revenue from sales tax to decrease?

A: We have been keeping abreast with the latest news and expert reports to enable us to make some educated projections, including actual trends from China and Italy related to hotel occupancy rates. I am projecting that the most damage will occur in the current fiscal year – March through June and then transition slowly back to the norm over a period of six to 12 months (perhaps longer) after that.

Q: How is this situation similar and/or different to the Great Recession, as far as how the city’s budget might be impacted?

A: This has been a much more abrupt and deeper impact initially – hitting the immediate four to six-month period in a sharper way. However, we anticipate the rebound to be swifter as well once restrictions are lifted and solutions to the virus are found. During the Great Recession, the city experienced a loss of over $4 million in sales tax revenue over a three-year period. It is unclear at this point how soon our economy will recover – depending on how well businesses survive and are able to rehire employees once conditions open up. Fortunately, the type of businesses in Sandy are fairly well diversified, which has helped soften the impact.

Q: Is the city in a better financial position now than in 2008?

A: We are in a similarly well-positioned financial condition now as compared to 2008. We have the same percentage of reserve balance in our General Fund and our bond credit rating is actually slightly higher at a AAA now, compared to a AA+ back then. There are only a handful of cities in the state that have this rating.


The Sandy City budget is projected to be presented to the Sandy City Council and the public during the May 5 council meeting.