Sherman sees $2.66M sales tax windfall for 2020-2021

Michael Hutchins
Herald Democrat
The city of Sherman amended its budget to reflect nearly $36.11 million in additional revenues.

Sherman will end the current fiscal year with more than $2.66 million in pocket from unforeseen sales tax revenues. City staff gave members of the city council an update on the current financials this week as a part of budgetary amendments aimed at closing out the 2020-2021 fiscal year.

This year's close out saw the city increase its sales tax revenues by $2.66 million or revenues that were not included in early estimates. Previously, city staff had described Sherman's sales revenues as above average, but in recent months they have been harder to predict with significant jumps in revenues.

"Annually, staff asks council for kind of a budget cleanup at the end of the year to really just reflect what has gone on in the year," Finance Director Mary Lawrence said. "This amendment primarily increases our sales tax revenue, which is a good story."

The budget amendment increased the city's revenues by $36.11 million and its expenses by $6 million. The majority of the new revenues related to $30 million in bonds that the city issued earlier this year in an effort to take advantage of historically-low lending rates. Other new revenues included $581,000 in engineering inspection fees and $1.02 million in CARES Act funding.

Likewise, some of the added expenses relate back to the CARES Act funding that the city received over the past year, including $286,000 for new gear for the fire department and $414,000 for emergency assistance programs. The largest new expense in the amendment is $2.4 million for capital project funding.

Lawrence said the city is using the additional revenues to support and increase reserve for the city's utility fund and general fund. The funding also allowed the city to move forward the purchase of a new solid waste truck which will replace an existing vehicle that was in a wreck. The truck was initially budgeted for the 2022 budget, but Lawrence said the city is ordering it now due to lengthy lead times.