On June 9, the Watertown City Council held a regular meeting via Zoom to discuss a few items. One of these items was utility adjustment rates for bars and restaurants, as well as liquor license fee adjustments due to COVID-19.
As June will be the first the first month the EDA will not be providing assistance to businesses for utility rates, the item was put forward so the city council could continue to help as needed, according to the document. In total, the EDA assistance was a bit over $41,000 for the months of March, April, and May.
In order to mitigate the costs to the city while still assisting businesses, there are a couple options. One of the main ones would be through the reduction of Equivalent Residential Unit (ERU) for bars, salons, and restaurants. According to the council’s agenda, fast food counts as one per 22 seats for the ERU, full service dine in is one per eight, and salons are one per four respectively.
To help businesses through the restrictions, all ERU calculations would be reduced to one, adjusting the calculations as restrictions lift.
“This support does have financial impacts for the city,” said Shane Fineran, city administrator. “In this scenario, through the ERU reduction, it would be a direct reduction in forecasted revenues for the enterprise funds.”
Those enterprise funds would be water and sewer specifically, leaving only those two budgets affected. The revenue reduction would be approximately $1600 per month, so the total effect would be dependent on how long this needs to last, as well as what adjustments are made over time.
Deborah Everson, councilmember, asked Fineran if the reduction was decided on because restaurants, bars, and salons are able to operate at limited capacity instead of full coverage the EDA offered for utility rates. Fineran answered in the affirmative.
Michael Walters, councilmember, asked for further explanation of why the city couldn’t offer the same full coverage service as the EDA, or why the EDA couldn’t continue with their assistance going forward. Fineran answered that as things continue to reopen and operate, the transition would be helpful as things continue to look up. There’s also the issue that the EDA cannot pay forever, and there’s still uncertainty regarding how long restrictions will be continuing.
Everson followed this up, asking how the budget would be affected if these reductions were approved.
The first set of reductions would be for the June billing, according to Fineran, and July would be determined depending on capacity changes. Even between the publishing of the agenda and the meeting, capacity was increased from 25 percent on patio to 50 percent dine in. However, Fineran also stated that even accounting for one month of ERU reductions without change, there’s some good news for the city.
“For the city’s budget in 2020, I think we can easily manage this without any concern,” he said. “Obviously going forward, if this were to stay longer term, there would be some concern.”
If it was long term, it could be over $10,000, but in the short term it would only be a little over $2000 for the month. If it does turn out to be long term, city staff would look once again at the calculations to determine next steps.
Everson also asked if this program could be available to all businesses in Watertown. Fineran stated that this is more about applying the city code to reality, since restaurants are under a specific ERU code based on seating. Without people being able to be in those seats, the city is simply applying the code in response to the restrictions.
Mayor Steve Washburn asked the council if they would rather see the council offer the reductions or the EDA. All members agreed that the reductions should be handled at a city level. Everson then made a motion to approve the ERU reductions for June. The motion was approved unanimously by the council.