Earlier in the meeting, Lakeway Finance Director Shereen Gendy broke down the city’s financial outlook as of the end of June, which shows so far the city is down $204,269 in revenue, having taken in $11.96 million against the budgeted $12.17 million.
Expenditures for the same time period show the city has only spent $9.8 million against a budgeted expenditure total of about $10.61 million for a difference of $808,882.
During the budget breakdown, City Manager Julie Oakley said the ad valorem tax roll should be released later this week, therefore none of the proposed tax rates have changed, nor have franchise fees.
The sales tax numbers were adjusted, however, as figures for the month of May show revenue came in at 7% higher than last May.
“However, there is still quite a bit of volatility in the sales tax numbers,” Oakley said, adding online sales were up 94% and served as a major driver of revenue in that category. “Online sales are important to us because we don’t have that dedicated infrastructure for retail.”
Grocery store revenue was also up in May 25% after falling in April. Liquor stores sales tax revenue also shot up in May to 48%, and restaurants, not being fully open, were down 3% in May compared with about 30% in March and April, Oakley said.
“So, if I average those three months, we are down 20% for restaurants,” she said.
Even though Lakeway’s last three months have been flat compared with last year’s numbers, Oakley said the volatility of the sales tax figures means officials must remain cautious.
Oakley also said an unnamed large commercial project will help with revenue moving forward.
Other sources of revenue for the city, such as the Lakeway Swim Center, will continue to change as the summer unfolds, and with adjustments so far, the year-over-year comparison with last year’s revenue shows a $525,000 shortfall, leading Oakley to discuss with council which expenditures could be cut, totaling about $360,000.
“We are still in the red by about $154,00,” she said.
New items in the fiscal year 2020-21 budget are also adding to expenditures and include longevity pay for certain city staff, virtual court software and maintenance to water retention ponds. The new expenditures, Oakley said, add up to about $127,000.
Oakley also broke down savings if the city does not pursue new positions for the coming fiscal year, including a grant program coordinator and emergency management coordinator. The total max cost of those positions for a full year add up to almost $500,000, according to Oakley.
“If the situation improves down the road, I would like to consider some of these needs for the city,” she said.
The city should save more than $1 million on expenditures for FY 2020-21, leaving a total of about $14.48 million budgeted.
“I’m very excited that the city is still in this very positive condition,” she said.
Following Oakley’s presentation, council discussed Lakeway’s ad valorem tax rates and whether they can stay the same as last year or be raised or lowered. The general consensus saw officials holding out hope the FY 2020-21 tax rate could stay the same as last year, $0.1645 per $100 of valuation, or even lower. But all agreed there is still much work to be done, and the proposed budget still needs to be formed toward that aim.