"I think through next budget season, we're still going to see some effects [of the pandemic]," Oakley said. "My general advice for uncertain times is to take flight toward conservatism."
Lakeway officials commenced budget discussions during the July 6 City Council meeting, with a prominent topic being keeping the city's general fund revenue as healthy as possible in a nearly unprecedented financial landscape.
To illustrate how bad things could get, Oakley presented council members with a kind of worst-case-scenario projection of what sales tax deficits of 10% occurring every month of fiscal year 2020-21 could do.
Essentially, Oakley said, the city would see a 12-month drop in sales tax revenue of $455,489 from what would be the case if there were no pandemic.
"There is so much volatility in this number," Oakley said.
Other line items in the city's budget are looking at shortfalls as well, including municipal court fines and fees, which were budgeted to grab $582,000 in revenue for FY 2019-20 but which will now come in at about $320,000, falling short about $247,800, according to Oakley.
Building and development fees have not seen a decrease in permits, Oakley said, but added that the city will not see its projected revenues for FY 2019-20 due mainly to one large project the city was looking to charge for permitting, which has been delayed by pandemic. The city does expect those permit revenues to come in FY 2020-21, she said.
Other volatile line items were shown in a projected $163,950 shortfall in total fees from the Lakeway Activity Center.
"Bottom line: We're projecting we're going to be $14.2 million and we budgeted for $15.1 million [in revenue]," Oakley said, which amounts to a potential decrease of about $937,000 from what was budgeted for FY 2019-20.
Oakley said some of the bigger ways to make up the nearly $1 million deficit lies in making adjustments as the situation unfolds. Freezing open hiring of positions, holding capital expenditures and, if absolutely necessary, furloughs are all options to stop the bleeding, she said.
Lakeway Mayor Sandy Cox, addressing the media directly during the virtual meeting, said she wanted to make it absolutely clear that the city has not decided to furlough its employees.
"Furloughs would be my last choice, but we have to look as an executive team ... [and ask,] 'What do we need to do?'" said Oakley, who is taking the helm of her first budget strategy with Lakeway since she became city manager in 2019. "I never thought that my first budget as a city manager, I would be in this difficult of a decision-making situation."
