Sedro-Woolley Stock

SEDRO-WOOLLEY — While first-quarter revenue for the city of Sedro-Woolley came in about normal despite the impacts of COVID-19 beginning in March, city staff and officials are projecting a possible $1.6 million loss by the end of 2020.

City Supervisor Doug Merriman said staff are looking for ways to trim expenses to account for the anticipated losses.

“Our city departments are being very creative in scrutinizing their budgets. It will not be an easy task,” he said.

A decline in sales tax brought about by many businesses being closed since March is expected to bring the largest hit to the city budget. Merriman said the city estimates it will see 30% less sales tax revenue — about a $550,000 loss — in 2020 compared to a normal year.

So far the first quarter, January through March, appears normal.

“We are still being very wary and maintaining a conservative position ... projecting what may occur for the rest of the year,” Merriman said.

Merriman said with a two-month lag time for the city to receive its portion of sales tax from the state, Sedro-Woolley on May 31 received its sales tax revenue from March.

The end of June will reveal what consumer spending looked like in April, and the effect on the second quarter — April through June — will become clear at the end of August.

When combined with reductions in revenue from city services, permitting and other taxes, the city budget may see about 17%, or $1.6 million, less in revenue in 2020.

That means less money for the city’s general fund, streets and arterial funds, parks fund and other sections of the budget.

While there are government grant programs available to help recovery, it’s not likely to cover all added costs and lost revenue Sedro-Woolley is facing.

The city qualifies for $350,700 in CARES Act funding. That money is reimbursable for certain expenses including payroll, public health, medical services, state order compliance and economic support spending specifically in response to the COVID-19 pandemic.

Merriman said the city will need to apply to the state Department of Commerce for reimbursement of qualifying costs such as overtime and medical supplies. He said the city is also researching other grants for which it may be eligible, including through FEMA.

Merriman first presented the likelihood of funding losses and budget cuts to the City Council at a work session May 6.

“Staff has already started the process of looking at steps to tighten our budget. This involves looking at each department’s budget line items, it involves a review of our fund balance reserves, and it will involve looking at how we allocate out costs and revenues to different programs around the city,” reads a memo called “Budget Response to COVID-19 Revenue Impacts.”

Mayor Julia Johnson told the Skagit Valley Herald following that meeting that adjusting the budget would be a challenge, but her goal is to avoid layoffs.

“I do not want to lose any employees. When I came on as mayor they were, in my opinion, significantly understaffed and over the past two and a half years I have worked hard to bring on more staff — and I don’t want to lose them,” she said.

Johnson commended Merriman for “going through the budget with a fine-toothed comb” and working to keep all staff on the city payroll.

“His mandate as far as I’m concerned is to keep people employed,” she said.

— Reporter Kimberly Cauvel: 360-416-2199,, Twitter: @Kimberly_SVH,

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.