The 2020 pandemic year required adaptations to every aspect of life you spent time with, where, where you ate, how your children were raised.
It was also a wild ride for the folks charged with keeping the financial condition of the town of Auburn afloat.
“It’s been a year ‘s roller coaster ride,” Auburn City Treasurer Jamie Thomas told the City Council on March 8 as she set out where the City of Auburn ended the 2020 financial year.
Here are some highlights from their report.
As Thomas noted, much of the city’s general fund revenue declined because Governor Jay Inslee closed all non-essential businesses in March 2020. By November, Inslee had placed additional restrictions on COVID-19 infections due to the increased rate.
The result was that the city’s revenue was lower by the end of 2020 than it would be in a normal year. And what took the brunt of the beating was entry tax, gambling tax, culture and recreation, and rents and leases.
So the city has done what was expected of it: it revised down some general fund income budgets to meet new 2020 expectations and cut spending to fill the expected revenue gap.
In 2020, Thomas said overall fund income was $ 81.1 million and was $ 4.6 million, or 6%, which benefited revised budget expectations. Thomas estimates that the annual loss of revenue for the General Fund in 2020 due to COVID-19 was between $ 6 million and $ 9 million.
To fill that void, the city made the following policy changes in mid-2020 that totaled $ 2.7 million in additional revenue for the general fund.
• Diverting interest income for most funds to the general fund for 2020, with retroactive effect until April. As a result of this change, the additional income for the general fund was an additional $ 263,000.
• For 2020, no portion of the automobile fuel tax revenue was allocated to the Arterial Street Fund, so that portion of the state’s revenue remained in the general fund.
• Replaced the source of funding for the Arterial Street Fund with real estate tax money. This policy change was made retrospectively January and the additional income for the general fund in 2020 due to this change was approximately $ 464,000.
• All utility tax revenues in the 2020 General Fund have been retained and this funding source for the Arterial Road Maintenance Fund has been replaced with REET (Real Estate Excise Tax) funds. This policy change, also backdated to January, resulted in additional revenue of $ 2 million for the general fund.
Notable deviations from the budget are:
• Retail Sales Tax: The sales tax report through December 2020 reflects the amounts paid to the City of Auburn based on sales from November 2019 through October 2020. Year-over-year sales losses were recorded in several categories, particularly manufacturing and the Automotive industry and service sectors.
While sales tax revenue declined in some areas, there were a few categories that exceeded expectations, Thomas said. Most notable was the construction category, which increased $ 876,000 in 2020 compared to 2019. While the city was expecting retail sales tax dollars to be significantly lower than in 2019 due to COVID-19, in 2020 actual values were $ 90,000, or 0.5% higher than last year, Thomas said.
• Building permit revenue in 2020 was $ 836,000 and was $ 116,000, or 16.1%, above budget, although that source of income ended the year nearly $ 400,000 below the 2019 revenue.
While the Stay Home, Stay Healthy contract hurt revenue from building permits, there were three major commercial projects in the city that contributed to higher than expected revenues in 2020: the replacement of the Pioneer Elementary School and the construction of Auburn Elementary School No. 16 and the Bridge Point Warehouse.
The city issued 476 building permits in 2020, which was 13.6% fewer than the number of permits issued in 2019, Thomas said.
• Culture and recreation revenue in 2020 was $ 1.6 million but was less than $ 962,000 less than 2019 revenue. These decreased revenues were a direct result of the COVID-19 pandemic, which resulted in the city closing most of its parks, art and art areas, recreational activities and services last March. While some activities resumed later in the year, they were generally reduced, and other activities continued to be suspended, delayed, or canceled to meet the governor’s guidelines for the gradual reopening plan for a safe start in Washington.
• In the 2020 budget, the need for a transfer of USD 4 million from the accumulated reserve fund was expected. However, due to the significant under-spending in 2020, only $ 2M of the $ 4M transfer was required.
The credits for the end of the 2020 fund will not be completed until June 2021, until adjustments are available at the end of the year and certification by the State Auditor’s Office. Once the final fund balances are available for the end of 2020, the budgeted fund balances for 2021 will be reconciled and adjusted accordingly, said Thomas.
Fund general spending in 2020 was $ 73.1 million versus a revised budget of $ 85.4 million. This is a favorable deviation from the budget of $ 12.3 million, or 14.4%.
Thomas said all departments were operating within their allocated budget in 2020 and wage and benefit costs were below $ 8 million. Additionally, the services and fees category was under $ 3.7 million, mostly for professional services and other expenses, said Thomas.