Kalona City Administrator Ryan Schlabaugh

City budgets may soon be feeling the pinch from the COVID-19 pandemic.

The state of Iowa is estimating a 10% drop in sales tax funds due to many retail businesses being forced to close.

Kalona City Administrator Ryan Schlabaugh said that it is too early to know how much of an impact a reduction in Local Option Sales Tax (LOST) revenue will have on the city’s budget.

“Time will tell as to the full impact of COVID-19 and how the sales tax dollars for Kalona are impacted,” Schlabaugh said. “As we see the true impact to our LOST revenues, we will have to evaluate and reprioritize our budgeted projects.”

Wellman City Administrator Kelly Litwiller said that the city will keep a close eye on the drop in sales tax revenue.

“As we see these impacts the city will need to determine funding for our debt payments and projects going forward,” Litwiller said. “We use LOST for current debt payments which are due June 30. I will be reviewing all this and keeping track in the next few weeks.”

Riverside City Administrator Christine Yancey has heard other cities talking about a drop of 25% to 30%, but right now, that is just a guess.

“If you don’t have the sales, you don’t have LOST,” she said.

Yancey added that cities and the county most likely will see a drop in road use funds due to fewer miles driven and the resulting drop in gas tax revenues.

Lone Tree City Clerk Stephanie Dautremont said the sales tax funds in Lone Tree were all slated to be used on the city’s wastewater plant renovations required by the state.

How much the revenues will drop is just a guess at this point, Dautremont said.

“There are clerks trying to guess what they will lose to prepare, but there has been nothing formal for us to actually count on,” she said. “At this point we do not know the impact it will have.”

Last week, the Washington County Riverboat Foundation announced that it is canceling its spring grants.

Schlabaugh said that the impact will be felt most in the city’s next fiscal year, which begins July 1.

“The city has been approved by the WCRF foundation for our upcoming projects,” Schlabaugh said. “We will have to evaluate the impact of the loss of municipal funding through WCRF due to COVID-19 business interruption to the Riverside Casino and Golf Resort.”

The city of Kalona receives about $140,000 in WCRF money.

Planned projects in Kalona included a “pocket park”; an ADA-compliant playground at Kalona City Park; replacing flag poles at Highway 1 and 22 and city park, as well as adding a new flag pole at Sharon Hill Cemetery; landscaping and tree removal around City Hall; partnering with the library to replace carpet in the community room and staff area; adding four black granite pillars to the Unknown Soldier Memorial at Sharon Hill Cemetery; debt service for the Kalona Community Center; and funds for Fall Festival and the Kalona Historical Society.

Riverside gets $100,000 per month in casino funds that goes into a number of areas – the general fund, construction projects and hotel-motel taxes.

This month, the city received its normal payment from the casino. That’s because the funds lag a month behind. This month’s check was based on casino revenues in March when the casino was open.

She said it will be next month that the city can begin to assess the effect of the governor closing the casino. Yancey said, the city has reserves that will be used in the short-term to keep budgeted projects on track.

Wellman had submitted applications for two grants: The expansion project at the Wellman Scofield Public Library and a new dishwasher at the Goodwin Senior Center.

Wellman received about $90,000 from the WCRF last year.

“Both of these will be on hold for time being until we can determine the funding for each,” Litwiller said.

Neither Kalona nor Wellman collect any hotel/motel taxes.