The public got one of their first glimpses into the coronavirus pandemic’s longer term effects on city government during the first reading of the Peru’s city budget on Monday night.

During a public comment period prior to the start of the City Council’s regular meeting, Eric Walsh, with financial consulting firm Baker Tilly, walked Council members through the 2021 proposed budget.

“You have actually reduced your general fund budget a little bit from last year,” Tilly said, noting that the 2021 budget, which came in just a little over $6 million was down from $6.3 million the previous year. “But still because of your reductions in revenues we are anticipating … we anticipate about a $300,000 shortfall in 2021.”

That shortfall, Tilly explained, has to do with projected losses from income taxes stemming from layoffs caused by the coronavirus pandemic.

There will also likely be losses felt from the shuttering of the Schneider Electric plant earlier this year, he said.

“Again, you’ve reduced your budget from last year … but you are seeing some revenue shortfalls that I think are going to pinch you a little bit that you are going to have to in essence dip into your savings account about $300,000,” Tilly said.

That is if the city spends everything it has budgeted.

Overall, Tilly said, most of the city’s funds are in decent shape with reserves within acceptable ranges.

On Tuesday, City Clerk-Treasurer Susan Stanley told the Tribune that she and others worked hard to get the budget trimmed back in anticipation of coming shortfalls, but this budget won’t likely be the last tight one brought on by the pandemic.

With state plans currently set to distribute up to 14 months of income taxes to counties instead of 12-months worth, Stanley said they have to plan on lighter disbursements in the future in order to pay that extra money back. If the pandemic persists, and the 2021 economy is just as weak, or weaker, than 2020 has proven to be, that could mean tougher decisions in the future.

“It’s next year that’s going to be the scary year,” Stanley said.

The current budget proposal comes back to the City Council for consideration at the October meeting.