"There's Good News Tonight!"
That title, the catch phrase from long-time radio newsman Gabriel Heatter, seems appropriate this evening.
MID-YEAR BUDGET REVIEW REPORT
The agenda for Tuesday evening's City Council Study Session was distributed this afternoon and it includes the Fiscal Year End 2010-2011 Mid-Year Budget Report. You can read that report HERE.
THINGS ARE NOT AS BAD AS WE THOUGHT!
The short version of this report is - we're not in as deep financial doo doo as we expected! This is good news, indeed.
ALL MAJOR REVENUE SOURCES ARE UP!
From a revenue standpoint, Sales Tax is up 9.07%; Transient Occupancy Tax is up 3.77% and Property Tax is up 13.33%.
The city consults with an outfit called Hinderliter de Llamas - which probably translates to something like "Tail light of the Llamas" - to help with sales tax revenues analysis. Based on the analysis the staff recommends an adjustment to the budget of $4,456,000. Whew!
In the case of the Transient Occupancy Tax the staff is recommending an adjustment of $1,050,000.
Based on the Property Tax revenues and their analysis the staff recommends an adjustment of $550,000.
EXPENDITURES ARE DOWN
On the Expenditure side, significant savings have been realized in many areas.
Prior Year (FY09-10) Labor Negotiations resulted in savings of $260,000.
Current Year (FY 10-11) Labor Negotiations resulted in savings projected to be $1,167,000.
Attrition Savings is projected to be $900,000.
Recreation Program Reductions will amount to $239,450.
Adjustments for Salary Accounts, for several reasons, will result in an additional budget cost of $1,175,000.
USE OF FUND BALANCE SEVERELY DIMINISHED
When the budget was prepared in June last year it was projected that we would need to use Fund Balance of $9.4 million. Through many of the efforts listed above and the negotiations with the employee associations and the higher amounts from various revenue sources the staff is currently projecting the use of fund balance of $1,387,192.
ATTACHMENT "C" IS VERY INTERESTING
All of this will be hashed out at the Study Session on Tuesday. Please take a minute to follow the link I provided above and read through Budget and Research Officer Bobby Young's excellent report and the accompanying charts. I found Attachment C, Budget to Actual Analysis - General Fund Expenditures by Department/Division, to be very interesting. The column on the far right edge of that chart provides a percentage of the funds budgets remaining for the last half of the year. 50% would be anticipated. In most cases the number is higher, but there are some line entries that jump out at you.
SOME NUMBERS LOWER
For example, the "Salaries and Benefits" lines for Police Administration, Fire Administration, Fire Protection and Engineering are all below that 50% number, in some cases well below it.
HOW WILL GOOD NEWS BE VIEWED?
It's going to be very interesting to see how this good news plays with certain new council members who have previously indicated that severe changes must be made to our fiscal management practices - particularly when it comes to salaries and benefits. Tuesday's meeting will give us a pretty good idea of just what kind of direction this new council wants to take our city. Some of the urgency of compensation reform may have been reduced by this good news. We'll see...
Labels: Budget Woes