The financial reverberations of the coronavirus pandemic on city revenue might be less severe than originally forecasted, according to new figures from the Minot Finance Department.

“The bottom line is we anticipate at this point that the amount that we need to really make up in a revenue forecast is about $6.3 million, and that’s still a sizable chunk of funding,” Finance Director David Lakefield told the Minot City Council Monday.

Initially, the impact had been projected at around $10.2 million in revenue losses.

The city forecasts a 25% reduction in sales tax from 2019. Prior to the pandemic, 2020 collections were coming in 5.5% over 2019.

“Sales tax aren’t looking terrible, but we most likely haven’t seen those impacts realized yet,” Lakefield said. Because the city had a $2 million cushion from 2019 sales tax revenues exceeding expenditures, the shortfall even with a 25% reduction is held to about $3.3 million, he said.

The city also had projected Hub City dollars from the state to be down by $1.5 million. Lakefield said an analysis presented by the West Dakota Energy Association showed the impact might not be that great because Hub City funding is among the first in line for oil tax revenues coming in.

To cut costs, the council previously voted to delay the northwest fire station construction a year and the City Hall retaining wall replacement by two years. Both had Hub City funding included in their payment plans.

Also, interest income is taking a hit but it appears to be not as significant as first thought, Lakefield said.

Good news for the airport came in the form of a federal grant that could offset some other reductions. Fuel costs also have been a silver lining in the budget, Lakefield said. Not only are fuel costs down, but this spring saw little need to bring out the snowplows, which reduced fuel use.

The finance department identified $7.6 million in potential cuts or savings from delaying projects this year, buying time to look for alternative funding or holding off until revenue sources have more certainty. With $7.6 million in available cuts and $6.3 million in projected revenue loss at this point, that gives a $1.3 million cushion going into this changing situation, Lakefield said.

“I think we’re in an environment where forecasts are very difficult,” council member Josh Wolsky responded. “You all are very likely to see me trend towards the more conservative, in terms of keeping dollars that we have, as opposed to taking steps and spending on things that we might be able to hedge on a little bit.”

Wolsky also asked for a close eye to be kept on the pension fund, given the changes occurring in financial markets. Lakefield replied that actuaries consider good years and bad years in calculating portfolios so a market downturn shouldn’t drastically impact the pension situation in the immediate term.