Town revenues hobbled by pandemic

The July revenue report to La Conner Council captures the economic impact to La Conner of shutting down the economy March 18 through May. Without the Tulip festival, April and May hotel/motel tax receipts were down 81.3%, $32,700 less than 2019. Sales tax receipts were down 29.3% for the two months, $37,276. The Council reviewed these financial reports at its meeting Tuesday,

General Fund revenue is 32% above projections, at $738,522, boosted by the $200,000 sale of the Town’s Kirsch property. The Town has also received $100,000 from its 2019 cell tower lease agreement with Crown Castle Cell Tower.

Town Administrator Scott Thomas was calm in a phone call he shared with Finance Director Maria DeGoede, updating the Weekly News Friday. “We’re still kind of hanging in there; we are still doing ok,” he said.

Mayor Ramon Hayes on Sunday praised the cell tower lease decision, noting “The town has taken measures to minimize the(se) losses.” Referencing the Kirsch property sale, he said, “We are not spending the money. We are tucking it away.”

The hotel/motel tax is limited to tourism promotion, Thomas pointed out. DeGoede called the fund “pretty healthy,” since the COVID-19 forced cancellation of public events. Promotional marketing and personnel expenditures have also been canceled.

Similarly, the Morris Street restrooms are closed and the cleaning contract, paid out of hotel/motel funds, stopped.

The Maple Hall elevator repair being made now, at over $100,000, is a 2019 budget line item.

Thomas was more concerned about the sales tax revenue decline. “We have a lot of retail businesses generating that tax,” he said, and the Town’s reliance is higher than other communities less retail dependent.

Staff are starting to prepare budgets for 2021 DeGoede said. Expenditures depend on revenues; the Town by law must balance its budget. Thomas hopes for a “return to some semblance of normality by next March.” If the pandemic still grips the nation La Conner will choke. “That will be two years in a row that we will miss out on the largest revenue impact that we have,” he said, raising the possibility of a 2021 without a Tulip Festival.

Council will pass the budget at its December meeting. “We only have nine or ten meetings the rest of the year. There is a lot of information that is going to happen with more limited time than we would like,” he said.

Hayes reflected on the damage and unfair preference big box stores were given this spring, while “mom and pop stores here” were shuttered.

But he was also bullish on a future and the town’s positioning as a destination attraction, citing the unique offering and an experience that Amazon cannot deliver. He called La Conner “the future of in-person retail” and the community “ultra-desirable.”

As mayor and a jewelry store owner he has been consistent in his message: “We can’t afford another closure. Everyone has to be responsible right now. On the other side of COVID we have the most to gain if we can make it.”