By: Erin Freeman | Lynnwood Times Staff
At its May 28 Special Finance Committee Meeting, the City Council received an update about the anticipated general fund shortfalls imposed by COVID-19 financial impacts, following the city’s finance team receiving sales tax information for March earlier that week.
Finance Director Sonja Springer announced to the councilmembers that sales tax revenue for March 2020 was $1,207,193. This 39% less than originally forecasted for the month before coronavirus induced impacts.
Springer’s original anticipated reduced amount of March sales tax due to COVID-19 was $1,380,000, or a 30% reduction.
“That is a shock, very bad news,” stated Springer. “We need to be very conservative, so I’ve updated my estimates on future sales tax revenues.”
Recognizing the present financial impact of COVID-19 on March’s sales tax, Springer increased estimated impacts for April through June by 10%. July through September reduction estimations have increased by 5%.
“It is a guessing game”, expressed Springer. “You don’t know until it comes in.”
Springer’s estimated total sales tax reduction is now at $4.7 million, one million higher than her original estimate of $3.7 million.
The Lynnwood Recreation Center and Senior Center are also now anticipating a $1 million revenue impact due to Gov. Jay Inslee’s safe start approach extending their operational suspension until mid-July.
The estimated city’s General Fund impact from COVID-19 is now at $6,641,900, and $7,751,900 for all city funds.
According to Springer, the city of Lynnwood experienced a decrease in the General Fund before the start of the coronavirus pandemic. General Fund revenues received in 2019 were 3% less than forecasted, creating a 1.6-million-dollar gap in the 2020 year. This adds to the gap in the city’s budget COVID-19 impacts.
This additional $1.6 million revenue adds to the $6.6 million general fund shortfalls imposed by COVID-19, brings the total 2020 revenue shortage to $8,241,900.
To offset the revenue shortage, city departments have identified $4,951,000 within their existing department budgets. The rec and senior center have also identified at least an additional $65,000 in cost savings through July 15. The remaining gap for 2020 is estimated at $3,225,800.
“That is scary to me,” expressed Springer. “I’m really concerned about 2020 and 2021…and beyond. This is going to be a challenging budget to put together for 2021 and 2022.”
The city of Lynnwood continues to work to identify additional cost saving expenditures.
Future Lynnwood City Council Business Meetings, Work Sessions and Committee Meetings can be streamed live by the public at https://www.youtube.com/user/CityofLynnwood/live.
