The full effects of COVID-19 and the accompanying shutdown remain to be determined and are still unpredictable. City leaders, however, remain hopeful and cautiously optimistic that Cleburne’s economy will fare better than expected in the months ahead.
Cleburne Finance Director Troy Lestina and Economic Development Manager Grady Easdon delivered updates on current economic indicators during Tuesday’s meeting of the Cleburne City Council.
Officials feared a large dip in Cleburne sales tax revenues after the COVID-19 pandemic caused Gov. Greg Abbott to shut numerous businesses down for several months. Most of those businesses have since reopened on a full or limited basis, although some remain shuttered.
Sales tax collection reports reflect collection numbers from two months previous, Lestina said.
“Our June numbers, which would be the April collections, showed our sales tax revenues down 6 percent over the same period in 2019,” Lestina said. “But our July numbers, which reflect May collections, showed us up 9 percent over the same 2019 period. So, with two months of numbers in from the COVID-19 period, we’re 3 percent to the positive over last year’s numbers.”
That’s cause for hope, but not yet celebration, Lestina said.
“The next couple of months’ reports will give us a fuller picture of how we’re doing since we’ve reopened so we have to wait and see what they bring,” he said. “The economy may contract some and hurt us but we’re hoping we will start to come out of this.”
City Manager Steve Polasek, with assistance from city staff, has to present council a proposed budget in August for the upcoming fiscal year, which begins Oct. 1.
Lestina said he’s not sure if the August report, reflecting June sales tax revenues, will be available by that deadline.
Lestina also reported that the city received federal CARES Act funding to assist with COVID-19 recovery costs. Those amounts include $355,685 for the city’s general fund, $69,000 for the airport, $38,396 for housing and $617,760 for county/city transportation funding.
“Overall, the city is performing well,” Lestina said. “We’re fortunate to be where we are though we will probably face some challenges in the months ahead.”
All Aboard Cleburne
Easdon updated council on the All Aboard Cleburne campaign, residential and commercial development and other economic trends.
Through the All Aboard Cleburne campaign, qualified local businesses received a one-time payment of $5,000 for promoting Cleburne as a “great place to do business.”
The city worked in conjunction with the Cleburne Chamber of Commerce to develop the campaign, which promoted shopping local.
Businesses receiving the payments were required to display All Aboard Cleburne posters in their stores as well as on their websites in addition to other required actions.
Funding for the program derives from the city’s Type A Economic Development Corporation, an entity approved by Cleburne voters several years ago. The original purpose was to purchase land for, and construct, The Depot, which serves as home to the Cleburne Railroaders and hosts other events.
Type A funding also went toward purchase of adjacent land for the Cleburne Station project, a planned mixed-use retail and restaurant development.
Lestina explained that, as per state law, up to 10 percent of a city’s 4A revenues may be used for promotional purposes. Easdon added that Type A revenues remain ahead of projections and that more than enough money remains in the account to service debt obligations on The Depot.
Council members allocated $300,000 for the program in April.
Easdon called the campaign a huge success.
“It’s been a lifeline for many of our businesses, with some owners telling us that it meant the difference between keeping their doors open or closing,” Easdon said.
Sixty local businesses received payments through the program, Easdon said.
Home construction remains robust
Another of the few bright spots of recent months is that new home construction remains robust, Easdon said.
New residential building permits through June total 144 compared to 89 for the same period last year.
“With the current subdivision projects underway and other new development projects in review, we should continue to see the pipeline of new residential construction remain active through 2021,” Easdon said.
That hope extends to homes in established neighborhoods thanks to Cleburne’s Infill Lot Impact Fee Rebate Incentive Program, which the city allocated $40,000 toward. The program rebates impact fee costs up to $4,000 to builders who purchase and build on so-called infill lots that dot neighborhoods throughout Cleburne.
The properties in many cases are not cost effective to build on. Building on them, however, returns the formerly vacant, substandard lots to the tax rolls, Easdon said. The requirement to build a new house also improves the overall quality of the affected neighborhoods, he said.
Of the $40,000 allocated for this fiscal year $36,000 has been distributed.
“Development of the infill lots throughout Cleburne continues to progress with many new homes now under construction or just recently completed,” Easdon said. “In several cases, homes are sold prior to construction being completed.”
Commercial development continues
Commercial development brings news good and bad, Easdon said.
On the down side, FFO Home Furniture Store is now permanently closed, a victim of the COVID-19 shutdown.
“It is one of several other stores in that chain that is not reopening,” Easdon said.
On the upside, construction of the long-awaited Chick-fil-A Restaurant continues with a fall opening anticipated.
“Our downtown retail businesses seem to be weathering the COVID-19 storm fairly well,” Easdon said. “We are not aware of any of those businesses closing permanently due to the pandemic. In communications with several of these business owners, optimism remains high for a bright economic recovery once the pandemic eases.”
Easdon noted that sales tax revenues for the year so far check in at 4.60 percent above revenues for the same period in 2019.
Unemployment below state average
On the other hand, Cleburne’s unemployment rate, 11.1 percent, remains high but below the state average of 12.7 percent.
The federal Payroll Protection Program, part of the CARES Act, benefitted 549 businesses, which received a total of $19,014,738 in grants and loans. The funding helped those businesses retain 3,100 jobs, Easdon said.
“Our optimism is tempered with the reality that COVIV-19 positive cases are increasing,” Easdon said. “Which creates the possibility that new mandates from the governor’s office may result in undertaking measures that could certainly have a negative impact on our economy. Consequently, we will continue to take a very cautious and conservative approach in our planning for the future.”
Mayor Scott Cain also expressed tempered hope going forward.
“As our sales tax revenues from the spring start coming in, we have seen better numbers than expected and are cautiously optimistic that the hit from COVID-19 may not be as bad as we first feared,” Cain said. “That being said, we remain committed to staying lean and cutting expenses wherever possible.”