The Lynnwood City Council is scheduled during its June 29 work session to discuss the financial impacts the COVID-19 pandemic has had on the city.
City staff is estimating Lynnwood will see an estimated revenue reduction of more than $7.8 million due to COVID-19. Coupled with $1.6 million in reduced revenues in 2019, the total reduction in general fund revenues in the 2019-20 budget is pegged at $9.4 million.
Additionally, the city has identified budget cuts and other steps have been taken to offset the revenue decrease. As a result, the current “gap” between 2020 revenues and expenditures is approximately $2.2 million. Staff is still working to identify reductions in programs using the “budgeting for outcomes” methodology.
There are six options city staff will consider for closing the estimated $2.2 million general fund gap:
- Allow the city to temporarily use a portion of the general fund unassigned fund balance or revenue stabilization fund balance.
- Consider a one-time transfer from the EDIF fund in 2020 to allow the city to meet its reserve requirements of two and one-half months at the end of the year. EDIF could be replenished when a healthier economy returns.
- Institute a mandatory furlough program for all city employees, excluding the Lynnwood Police Department. A mandatory furlough of eight days would save the city approximately $641,000. A mandatory furlough of 15 days would generate over $1.2 million of savings to the general fund.
- Achieve the $2.2 million of savings needed in the general fund by laying off employees. This would require laying off approximately 56 employees for the last three months of the year.
- A combination of option No. 1 and No. 2 to fill the gap at the end of 2020.
- A combination of option No. 4 and No. 5 to fill the 2020 gap.
To view the full meeting agenda, click here.