The COVID-19 pandemic and unprecedented restrictions on business had a lesser impact on the Town of Parker’s operating budget than expected, according to the most recent projection for the remainder of 2020. Two major funds, the cultural and recreational departments, are hurting the worst.

Finance officials estimated a loss of 33% in annual sales tax revenue, the town’s main funding source, when council passed a budget amendment in July. The amended budget states the town stood to lose $10 million in total revenue, a result of the “aggressive approach” the town took estimating the impact of the stay-at-home order, according to Finance Director Mary Lou Brown.

“When the town did the July budget amendment, there were still many unknowns as to the continuing impacts of COVID-19,” Brown said. “We included a very conservative revenue estimate in this revision as the pandemic and its impacts were continuing and the situation was still very unpredictable.”

Most of the year has passed, giving the town a clearer image of its budget situation, Brown said.

“That being said, the remainder of 2020 will continue to be impacted, especially now that Douglas County has been moved to (level) red on the CDPHE dial,” Brown said.

Gov. Jared Polis instituted a level red “severe risk” order for Douglas County and 14 other counties Nov. 17. Restaurants must not allow indoor dining. Gyms can open at 10% capacity. Retail stores can open at 50%. Salons can operate at 25%.

The original blow to the town’s bottom line did not materialize how officials estimated in July.

The town’s 2021 budget projects a 1.9% increase in total revenue, a figure reflecting inflationary costs, Brown said. The Consumer Price Index for all urban consumers in the Denver-Aurora-Lakewood Metropolitan Statistical Area grew 1.1% in the 12 months prior to Sept. 30.

The finance department assumed a continuation of budget impacts related to COVID-19 through the first six months of 2021.

“When adjusting for the pandemic in the town budget, staff used educated assumptions about how revenue sources would be impacted by the pandemic given associated closures and other economic impacts,” Brown said. “Revenue reductions then drive expenditure reductions to ensure a balanced budget.”

Sales tax collections are projected to grow 3% in 2021.

“Although the rate of our sales tax growth has declined from some previous years, town sales tax is still experiencing year-over-year … growth, which is positive,” Brown said.

Less is known for the town’s cultural and recreational departments. Both departments rely heavily on revenue through ticket sales, programming, memberships and other fees.

“When services or facilities are shut down or otherwise impacted by the pandemic, this impacts revenues, which in turn impacts expenditures,” Brown said.

Brown said the cash balances for both the cultural and recreational funds will be monitored closely for the remainder of 2020 and early 2021, and depending on whether customer levels return to normal, additional budget actions may be needed in 2021.

The town’s cultural fund is projected to lose more money than the town estimated in July. Ticket sales have dropped 67% from 2019. Cultural fund revenue is budgeted to recover slightly in 2021 but is still projected to fall 23% shy of 2019 numbers.

The recreation fund also fell short of July estimations, but has a brighter outlook for 2021. Revenue fell 32% from 2019 — all of which can be attributed to scaled-back hours and programming through town-sponsored leagues and events as well as the Fieldhouse and Parker Recreation Center. The 2021 adopted budget projects recreation revenue will bounce back to 2019 numbers and then some.

By the end of 2021, the town projects to have $18.4 million cash-on-hand.

Drafting the 2021 budget began in mid-July, according to the Nov. 16 town council meeting staff report. A budget retreat was held Sept. 25. Town council reviewed the budget during two study sessions and two public hearings. The town followed four guidelines when drafting the budget: meeting the general fund required cash balance percentage, invest in employees, maintain and grow community programs, and prepare financially for upcoming strategic infrastructure decisions.