The Auburn City Council reviewed the projected budgets for Fiscal Years 2021 and 2022 at a work session on Monday, as the city grapples with uncertainty around future revenues due to the Covid-19 pandemic.
The revenues and other financing sources for FY21 is projected at about $145.32 million, a roughly $5.2 million decrease from FY20. It's expected to drop to $130 million in FY22.
"I think we have a considerable safety net," said City Manager Jim Buston, when responding to a question about potential budget shortfalls from Councilman Brett Smith. "We basically budgeted as if football is nonexistent.
"We minimized the impact of football by just assuming that we're not going to get any revenue from football."
The city showed an ending fund balance of roughly $47.7 million for FY2020. That balance is projected to drop to about $29 million in FY2021 and to $26.2 million in FY2022, which represent more than the city's target of 25 percent of total expenditures and uses.
Total expenditures and uses are projected at $112.1 million in FY21 and $99.7 million in FY22. Total expenditures and uses for FY20 are roughly $98.7 million.
The city made a number of assumptions in its projections, including reduced sales tax revenue and the development of a vaccine for Covid-19 at some point in 2021.
"As this pandemic goes on, the more we'll have to look at our revenues," said Buston, who noted the city took a very conservative approach in projecting the FY21 budget.
"These revenue projections have been challenging. I will not even pretend that that is not the case," said Finance Director Allison Edge. "I often thought that I needed to pull out my 8-ball and just shake it and ask some questions."
Sales and use tax revenue typically accounts for 45 to 50 percent of the General Fund budget, said Edge, who added that the city is approaching its forecasting of sales and use tax for the fall of FY21 and FY22 based upon collections usually received during the spring.
The hardest hit revenue source during the pandemic has been lodging tax, which is projected to be 23.6 percent lower than FY19, although a rebound of 8.6 percent is projected in FY2021, with a return to normal levels in FY2022.