Despite the challenges brought about the COVID-19 pandemic, the La Verne City Council received positive news this month regarding the City’s sales tax revenues and its Comprehensive Annual Financial Report (CAFR).
“It takes a village to make things work, and we definitely have a great village here at the City of La Verne – from our various department staff and all the way up,” said La Verne Mayor Tim Hepburn. “It’s because of their decisions and actions that our City, unlike many others, has been able to show such financial resilience and maintain a ‘clean bill of health’ during these challenging financial times.”
The Fiscal Year 2019-2020 (FY 19-20) budget experienced a 3% sales drop revenue because of the widespread impacts COVID-19 had on the local economy. Because of this, the City of La Verne had conservatively estimated its projected sales tax revenue at $3.85 million for the Fiscal Year 2020-21 (FY 20-21) budget. The budget previously adopted by the Council assumed a 16.5% drop in sales tax collection when compared to Fiscal Year 2018-19, which was reflected in operational budget cuts across all departments, as well as hiring freezes.
The economy has, however, been performing better than originally projected since last summer. This has largely been due to the continued growth in online sales, with last quarter receipts 30% above the average for the last four quarters. The increased sales tax revenue projection has allowed the City to revise its projected sales tax revenue for FY 20-21 to $4.5 million. Based on this favorable news, staff is expecting to come back to the La Verne City Council during the Mid-Year Budget Update in March 2021 with specific recommendations to increase appropriations. The areas brought forward may include public safety cameras and software, street and sidewalk repaving projects, traffic signal and lighting maintenance work, and tree and park maintenance work. Possible positions include an assistant planner in Community Development. While the economic outlook is currently favorable, the City also recognizes that there may be some lagged effects on the economy that could affect future revenue growth.
The City also recently completed its CAFR for FY 19-20, which has also been audited by an outside independent audit firm. This report is a complete record of the City’s financial activities from the past fiscal year, including information on city funding sources as well as expenditures. For example, as is common for most cities, the top expenditure for La Verne was public safety (58%) followed by public works (16%).
The auditing firm, Rogers, Anderson, Malody & Scott, LLP (RAMS), affirmed that the accounting records and financial presentations are proper and reflect positively upon La Verne’s commitment to be accountable to the citizens concerning the City’s financial resources. RAMS also confirmed that there are no deficiencies in the City’s internal financial controls. Based on the outcome of the CAFR, the City is expected to submit for a Government Finance Officers Association of the United States and Canada (GFOA) Certificate of Achievement for Excellence in Financial Reporting, which the City was awarded in the previous year.