Lake Forest Park Municipal Services in good shape to weather the Covid crisis…for this year

Friday, July 24, 2020

Tracy Furutani, reporter

By Tracy Furutani

The city of Lake Forest Park is generating enough revenue and has made enough spending cuts to fund municipal services for the remainder of the year, according to city staff presenting at the City Council’s Budget and Finance Committee meeting last Thursday evening.

“On the revenue side, there are two silver linings that look interesting,” said Councilmember John Resha, chair of the committee. 
“The Real Estate Excise Tax [revenue] continues to trend strong. We’re still seeing strong home sales in Lake Forest Park.” 
Many communities that have a heavy reliance on the sales tax are not doing well because of lost sales, but “we’re actually trending ahead in sales tax revenue. Why, we don’t know,” he said, though he speculated online sales may be compensating.

The presentation included the accompanying figure, showing the different revenue streams the city receives, each row being a different source of income and the length of the bar indicating the dollar amount of that stream in thousands of dollars. These streams are not all of the revenue that flows to the city, and there is some time lag in the reporting of dollar amounts in some of the streams.

The percentage on each bar shows how much of the anticipated revenue for each source has been collected. The city works on a 24-month budget cycle ending at the end of this year. So, as of the end of June, each bar should read “75%” to be on-target, explained city Finance Director Lindsey Vaughn. 

While the amounts for the Business and Occupation Tax, the Gas Tax and passport sales are down comparatively, the Real Estate Excise Tax is quite a bit up. Even with the high-profile closures of Town Center tenants such as Forest Park Cleaners and VSOP Jewelry, the revenue from Sales and Use Tax is still ahead of where it should be.

On the cost-cutting side, “the City Administration anticipated very early on that the City of Lake Forest Park could realize between a 12-15% revenue loss in the General Fund due to the COVID19 pandemic,” said Vaughn in a statement later. 
“City Administration quickly acted by freezing all vacant positions including not hiring seasonal positions, suspending all nonessential training [and] travel, freezing all discretionary spending, and reserving the ability to suspend contracted work as appropriate. 
"In addition, the City Administrator and Finance Director worked with all departments to identify 15% departmental budget cuts to reduce expenditures until more became known about the financial impact of the COVID19 pandemic directly to the City of Lake Forest Park.”

“Huge props to the mayor and the city administrator” for enacting the spending freezes, agreed Resha.

The City Council will be considering the next biennial budget in the coming months.


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