The Indian Trail Improvement District Board of Supervisors adopted its budget of $13.9 million for fiscal year 2020-21 on Wednesday, July 15, along with an assessment roll that will remain flat for most residents.
Finance Director Jose Cabrera said that ITID in nearing the end of its budgetary process after holding workshops and public hearings.
“We also submitted the preliminary assessment rates to the Tax Collector’s Office, and they are waiting for the final rates. The deadline is the end of this month,” Cabrera said. “We are waiting for the board to approve the 2020-21 budget.”
The total expenditures for the operating budget has decreased to $13,915,624 from $17,525,139 during the current fiscal year due to the removal of allocated funds for both the M-1 Canal inverted siphon at $1 million as part of the county’s expansion of 60th Street North and the R2 roadway repaving project at $2.75 million.
ITID President Betty Argue asked about the restricted funds that had been set aside, and ITID Executive Director Burgess Hanson said that would appear in the final draft of the budget.
“Once the board approves the budget, we will make those adjustments,” Hanson said. “That approved budget will be distributed in the next couple of days, creating the restricted fund balance.”
He added that the final budget will be posted online as well.
Supervisor Joni Martin made a motion to approve the budget, which carried 5-0.
In other business, the board heard an investment update from David Jang with Water Walker Investments, who said the economy has fluctuated due to the COVID-19 pandemic.
“What happened in March and April this year is roughly 23 million jobs were lost and the economy shut down,” Jang said. “There’s a lot of things going on. What we’re worried about right now, and a lot of economists are worried about, is long-term performance. In this time, you see that the leisure and hospitality industry has suffered the most losses. No one’s flying anywhere, and no one’s going out to eat. A lot of restaurants closed.”
With the rise of the virus again, the economy is looking at another possible closure with reduced capacity in restaurants and less travel.
“American Airlines announced that it is furloughing about 25,000 jobs,” he said. “We’re really worried about the long-term trend toward unemployment, because if you’re not employed, you’re not going to consume.”
Jang noted that the consumer represents almost 70 percent of the nation’s $21 trillion annual economy.
“How are we going to get out of this situation?” Jang asked. “One good thing about what’s going on is that household debt services and costs have gone down since the Great Recession 11 years ago. Refinancing a home or buying a home right now, you’re in great shape. Rates are at an all-time low.”
Jang said that the lower quartile of wage earners is spending only 5 percent less because they have bills to pay, while the upper quartile is spending 15 percent less because they have more disposable income.
“So, the good news is that rates are low, while the bad news is, we really don’t know where this economy is going to go,” he said.
Meanwhile, the Federal Reserve lowered the prime rate in response to COVID-19, which will have a negative effect on the ITID’s $6.7 million investment portfolio.