The recently released city staff report on Elk Grove’s 2020-21 fiscal year shows a $3.8 million increase in the city’s sales tax revenue.

In his report to the Elk Grove City Council on Oct. 27, Shane Narayan, the city’s budget manager, shared details about that increase.

“The city has received nearly $35 million in sales tax revenues for the prior fiscal year, which is nearly $4 million more than estimated,” he said. “According to the city’s sales tax consultants, sales tax revenues outperformed projections during the spring of 2021.

“So, significant growth was experienced this past spring, when compared to the spring of 2020 – the prior year. This is not surprising, given that the (COVID-19-related) shelter-in-place orders during the spring of 2020 were happening when many businesses were temporarily closed or had capacity restrictions.”

Representing 30% of the city’s total sales tax revenue was the revenue from new motor vehicle sales and transportation, which is the city’s largest industry group.

During the previous fiscal year, which ended on June 30, the new motor vehicle sales and transportation industry surpassed projections by nearly $318,000.

Also outpacing projections during the past fiscal year was local restaurants and grocery stores.

“(These businesses) have already exceeded their pre-pandemic sales tax revenues,” notes a city staff report. “These upward trends in sales tax revenues are indicative of continued economic recovery amidst the pandemic.”

Also notable was the city’s property tax revenue for the 2020-21 fiscal year.

During that period, this revenue was about $125,000 more than the year-end estimate.

The city staff report mentions that the impact on this revenue was minimal, because construction and real estate work was permitted to continue during the majority of the pandemic.

Additionally outpacing projections were business and industry, by about $594,000; and general consumer goods, by about $378,000.

Although the city’s year-end General Fund revenues for the 2020-21 fiscal year exceeded the final budget by $573,317, the city’s General Fund revenues fell short of estimates for the year by $1.3 million.

Presented during the Oct. 27 council meeting was a chart showing a breakdown of the General Fund reserve balance.

At the bottom of that chart is the total General Fund reserve balance of $30.1 million.

That balance, Narayan noted, is about $14,000 less than the projected amount in the city’s fiscal year 2020-21 budget book.

Narayan also commented on funding for the Great Plates Delivered program, which provides relief to struggling restaurants by paying them to cook and deliver meals to seniors during the pandemic. The federal payment for that program was received late, and represents the largest revenue variance in any of the segments of the General Fund.

“Considering that if all of the revenue for the Great Plates Delivered program had been received in (the fiscal year) 2021, rather than (the fiscal year) 2022, the General Fund reserve balance on June 30 would be approximately $5 to $6 million greater than the amount presented (on the chart),” he said.

“Considering that, really, being that close to the projection that’s presented in the budget publication is a very, very positive piece of news, because (there) could have been a lot more to that.”

After hearing the report on the 2020-21 fiscal year budget, the council unanimously voted to approve several city staff-recommended amendments, including transferring more than $5 million in Great Plates reimbursement revenues from the General Fund to the General Capital Reserve fund, for the funding of council priority projects.

Among the other amendments were increasing the aquatics center’s capital maintenance budget by $430,271, and reducing the surplus Laguna Ridge park facilities artwork budget by $132,000.

Elk Grove Mayor Bobbie Singh-Allen summarized her thoughts on the state of the city budget.

“What I’m seeing here is that we’re in good financial health and we are recovering, not 100% there, but we’re doing a lot better than actually a lot of other municipalities,” she said. “So, that makes me happy.”