Despite projected economic consequences of coronavirus closures, the city of Lakeway is in a good position financially, according to Julie Oakley city manager.
As of April 30 expenditures are running about $575,788 ahead of the fiscal year 2019-20 budget, much of which was attributed to personnel savings. The calculations also reflect $40,000 in savings as the result of not holding an election.
“Overall we know there’s going to be savings of $575,788, that is likely to hold,” Oakley said. “But we’ve been conservative in our projections, you’ll see we’re projecting $500,000.”
Oakley presented an economic forecast during the April 20 meeting, reporting a realistic variance from its budget of a deficit of $1.1 million. Today that estimate is approximately $720,000.
“We’ve set ourselves up for success from the beginning,” Oakley said, adding that moving forward conservatism will continue to be built into budget projections.
The office of the Texas comptroller released city-by-city numbers for March sales tax revenue May 6. Lakeway saw an increase of about $30,000 in sales tax payments when compared to March of 2019. However, the FY 2019-20 budget reflected a projected increase of $80,000 compared to the previous year.
“The city is still in a very good place even with sales tax which is the most volatile right now,” Oakley said.
Council members reviewed sales tax information broken down by industry complied by Oakley and city staff.
Accommodation and food services took the hardest hit with a sales tax payment decrease of 35%. In April, the initial decrease was forecasted at 54%. Industries such as grocery stores and online sales saw an increase of 30% and 35% respectively.
Overall sales tax projections showed a decrease of 3%, significantly lower than the 13% initially projected in April.
“I’m excited to report that we don’t have a large issue that we’re going to have to work through,” Oakley said.
At the same time, city officials are monitoring the situation closely. Oakley noted the data from April will likely be very different from March.
“We’re going to have to watch each month,” Mayor Sandy Cox said.
Council with have future conversations around potentially trimming expenditures for next year’s budget.