Englewood faces loss in sales tax revenue

The city projects a net revenue shortfall of at least $1.6 million

Joseph Rios
jrios@coloradocommunitymedia.com
Posted 4/19/20

It is still too early to fully evaluate the financial impact the COVID-19 pandemic will have on the city of Englewood, but city staff is optimistic it won't be as affected as other cities. About 61% …

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Englewood faces loss in sales tax revenue

The city projects a net revenue shortfall of at least $1.6 million

Posted

It is still too early to fully evaluate the financial impact the COVID-19 pandemic will have on the city of Englewood, but city staff is optimistic it won't be as affected as other cities.

About 61% of general-fund revenue in Englewood comes from sales and use tax. But with Colorado restaurants and bars being barred from offering dine-in services until at least April 30, and non-essential businesses like most retail stores being temporarily closed because of COVID-19, the city is projecting a net revenue shortfall of at least $1.6 million.

At the end of the month, Englewood staff will evaluate business activity for March and provide an update to the Englewood City Council as soon as sales tax numbers are made available, Englewood Finance Director Maria Sobota said.

“Without looking at data, it is difficult to estimate what the impact (of the COVID-19 pandemic) is. Englewood has diverse businesses, and as a result, a lot of them are still providing essential services,” Sobota said.

She said she is optimistic Englewood won't see a shortfall as severe as many other cities are expecting because of the city's diverse businesses. Boulder, for example, announced April 14 it was furloughing 737 employees for 10 weeks.

Englewood looked at every department's budgets and what savings they have accumulated based on delayed hiring, city employees not being able to travel for trainings and reduced spending. Sobota said the city accumulated $1.1 million in savings from all of those factors.

“The city will understand more about the potential impact in the coming weeks and will continue to keep city council apprised. The city remains committed to achieve current service levels throughout the duration of the pandemic and will seek city council's approval to use the general fund unassigned balance (of $18.8 million) to offset any budgetary impact,” said Sobota.

Waiting for things to get back to normal

Frame de Art in Englewood, a shop at 3065 S. Broadway that offers custom frames for art and memorabilia, has been open for 29 years, said owner Brian Hart. He said that in those 29 years, he never has had to lay anyone off due to lack of business until the end of March when he let go of three of his employees.

“To lay them off when we were starting one of our busiest years — I care about my employees, I care about the community. We're part of this community, so it was very hard, and it's scary,” said Hart.

Frame de Art was one of over 100 Englewood businesses to receive a grant from the city's COVID-19 Small Business Support and Recovery Grant Program, which launched on March 24. Hart received $2,000 from the program and is using it for marketing and to pay his one employee.

“As a small business owner, I pray and hope that we reopen soon. There are a lot of businesses like mine that are nonessential, and to me, mine is as essential as any other,” said Hart. “I hope the community will gather and support these businesses that have not been able to be open, because we are going to need the opportunity.”

Other Englewood businesses echoed Hart's eagerness to reopen. One is Sweet Caroline Confections, a custom lollipop store at 3483 S. Broadway.

Andrea Caroline, the owner of Sweet Caroline Confections, said a large portion of the store's sales come from events — but those are not happening right now because of the COVID-19 pandemic.

“As a new business in Englewood, this could not have happened at a worse time. We just opened our storefront less than six months ago and have had to close to protect both our customers and my team,” said Caroline. “With zero sales at our store, even our online sales have decreased significantly.”

Sweet Caroline Confections is watching its cash flow very closely as it ponders long term projects to try to stay afloat, Caroline said. The store launched a GoFundMe campaign for financial support and is offering some lollipop benefits in return for any contribution to the fundraiser.

“I've grown this business from scratch, and I will continue fighting for it until we get out of this,” said Caroline.

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