La Verne reports better-than-expected revenues.
A midyear budget review shows a stronger finish than expected for the current fiscal year in La Verne, with sales tax revenues projected to come in $550,000 ahead of original estimates last spring.
The city is expecting $4.4 million in sales tax revenue for the 2020-21 fiscal year, which ends June 30, Mark Alvarado, director of Finance Services, reported Monday, March 15. The figure still remains $100,000 less than what was collected in the 2019-20 fiscal year.
Over the past few months, sales tax revenue projections have climbed steadily since the city’s budget was originally adopted in June 2020, increasing from $3.85 million to $4.2 million in October and to $4.5 million in February.
The $100,000 drop from the last budget update is due to an anticipated change in regards to revenue from online shopping, specifically from Amazon and its sales tax reporting. The global e-commerce company may possibly shift some revenues to cities where distribution sites are located instead of where items are shipped.
“It has nothing to do with the economy and people not buying stuff, it’s (Amazon) looking at changing their reporting,” Alvarado said.
In preparation for that possible change, the city adjusted its projections accordingly, he added.
Revenues in other areas have increased as well, including property taxes, estimated at totaling $5.4 million this year, a $329,000 increase from 2019-20. Motor vehicle in-lieu fees are now projected to hit $3.9 million, resulting in an additional $149,000 in revenue.
Measure LV, a 0.75% sales tax increase approved by La Verne residents in March 2020, will bring in $3.3 million for the current fiscal year. The city’s original projection was $2.7 million.
Nonetheless, the city still saw some significant losses. The Fire Department was forced to shut down in-house transport services in 2020 because of staffing shortages. While one ambulance resumed service last fall, revenues will be about $300,000 this year, a $440,000 decrease from original estimates.
Additionally, the city incurred about $75,000 in costs since it outsourced services to Care Ambulance for a portion of the year, Alvarado said.
Still, the better-than-projected financial outlook has given the city the option to undo some operational cuts adopted last June. Staff recommends increasing appropriations for specific projects and positions that have been unfilled.
This may include $60,000 for vehicle maintenance, $79,000 for street work repairs and $39,000 for new Police Department equipment. Restored positions include an assistant planner in the Community Development Department.
While the city is in a good place financially, Mayor Tim Hepburn said, the future remains uncertain.
“I appreciate our conservative approach to everything we do to make sure that the tip of the scale goes in our favor,” Hepburn said on Monday night. “Still, we’re not out of the woods. This is a rough environment that’s changing every day.”