Ann Arbor Times

The City of Ann Arbor is positioning itself to buffer the impact of the COVID-19 pandemic.

A new budget for 2020-21 was prepared in March after the coronavirus outbreak, and it is set for final review in May. The economic impact to the city’s general fund budget could cost as much as $5 million this fiscal year. Next year, the economic fallout is expected to cost the city at least $6 million. Ann Arbor has $16 million in general fund reserves, according to MLive.

Overall, the city is optimistic in covering the economic impact due to the financial stability that the University of Michigan has provided over the years, and the expected losses to the budget have accounted for the most positive and negative scenarios in the future.

The City Council presumes a 24-month economic downturn before things eventually turn around.

“We are making an assumption that any semblance of normality will likely not occur until at least immunization is in place and inoculations can be implemented,” Tom Crawford, interim city administrator, told MLive.

The losses to the budget are predicted to hit in key areas of city revenue, including parks and recreation fees, downtown parking fees, state-shared revenue, as well as city permit and inspection fees.

For the immediate future, the revenue is projected to be lower and the needs higher. The city may also have to supplement retiree pensions and benefits if the financial market does not rebound.

The City Council is hoping for the financial stability provided by the University of Michigan in the fall, but they will lose that reliability if classes resume being held online and the football season is cancelled.

“We’re not used to that in this community, because we’ve had the stability of the university,” Crawford told MLive.

“The recovery we will have from this — it will be a marathon and not a sprint,” Crawford told MLive. “Because of that, it’s really important that we retain our fiscal capacity, because we’re going to have challenges not only now, but in the medium- and the long-term. We need to pace ourselves for these events.”