While local governments throughout the country agonize over budgets and deal with economic destruction caused by the COVID-19 pandemic, La Cañada Flintridge officials look toward the next fiscal year with much optimism, thanks to a healthy reserve and solid — all things considered — 2019-20.
Asked Wednesday whether he believed LCF finances are in good shape, City Manager Mark Alexander said, “I do, actually. We did, obviously, realize that there was an impact to revenue as a result of the pandemic. … In comparison to other cities, we’re doing very well; plus, we have a healthy reserve on which to draw if we needed to.”
Alexander presented current budget estimates and projections for the 2020-21 fiscal year to the City Council on Tuesday in the first of four virtual meetings. The council is scheduled to further discuss finances today and Monday, June 29, before officially adopting the new budget on Tuesday, June 30, at 8:30 a.m.
The city has a track record of fiscal responsibility, according to records dating to 1994-95 that Alexander presented, and that trend continued this past year despite the closing of businesses due to the Safer at Home orders from Los Angeles County.
“Over the last 26 years, we have a history of revenues exceeding our expenditures,” Alexander told the council as he presented his “favorite” slide.
According to Alexander’s report, current general fund revenues are projected to come in at $798,775 below midyear budget estimates, mostly due to the estimated $480,650 loss of sales tax revenue from the closure of retail stores. LCF receives 1% of the 9.5% sales tax on purchases made in the city.
Despite the losses, total 2019-20 revenue stands at $14,970,325 — still more than the city’s expenditures of $14,126,925.
Property tax has been the city’s top source of revenue and will be a big part of the projected $15,351,400 in cash revenues for 2020-21. The city gets only seven cents on each dollar of property tax paid by residents, a low number compared to those in other cities, according to Alexander. After proposed reimbursements and transfers and expenditures, the city will have a balance of $397,100 available for council consideration items.
The city is expected to have an estimated $14,494,300 reserve as 2019-20 closes, and that is expected to increase to $14,891,400 in the next fiscal year.
“Despite these challenges, the city remains in strong financial position to weather through the pandemic and the economic outfall as a result,” Alexander wrote in his report. “… Amazingly, property tax and property tax revenue continues to be the city’s fallback as revenue is projected to increase budget by $112,550, thus offsetting some of the losses. For the fiscal year of 2020-2021, the revenue appears to be slightly higher as businesses are allowed to reopen.”
City Finances in Good Shape, Top Official Says
