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HomeMy WebLinkAboutPackets - Council Packets (711)Council Meeting Regular Session March 7, 2018 1 Town Council Meeting Announcements 2 Upcoming Meetings 3 4 5 Fiscal Year 2017/18 Financial Update Through Dec. 2017 March 7, 2018 -We place our mid-year financial update on reg agenda this same time every year to give an update on our major funds as we begin next year’s budget process -Financial position is strong and stable, no concerns in any of our funds, all good news to report tonight 6 FY 17/18 BUDGET BY FUND AS % OF TOTAL BUDGET This chart shows the FY 17/18 budget by fund as a % of the total budget. The funds in color are what I’m covering tonight. General Fund at 36%, Stormwater Utility Fund at 1%, Highway Fund at 4%, Bed Tax Fund at 1%, Comm Ctr Fund at 5% and the Water Utility Fund at 19%. Together these funds comprise about two-thirds of the total adopted budget of $128.6M. This year’s update no different from past year’s updates through mid-year in that there are some areas that are trending to come in over budget and some areas trending to come in slightly under budget, so I will cover those and discuss the reasons why these areas are trending as they are. 7 GENERAL FUND REVENUES Starting with General Fund revenues, the next two slides highlight the major revenue sources, how they are trending compared to budget, what the estimated variance is to budget and the reason for the variance. This slide focuses on the Local Sales Tax revenue category in the General fund. Local sales taxes make up about 47%, or $17M, of the General Fund’s $36M budget, so this slide highlights several of the main categories of sales tax that we collect in the General Fund. At the top, construction sales taxes (collect a 4% construction sales tax) - budgeted just under $4.4M and estimate that actual collections will end the year just under $5.2 million, so about $800K over, due primarily to residential activity – 339 SFR permits issued in 16/17. Steady commercial activity. Utility – collect a 4% utility sales tax and budgeted $2.9M. This category is trending about $200K above budget, and this could be due to population growth (apartments, single family homes); 2017 TEP rate increase; weather (dry & warm – increased water use and possibly electricity as well) Retail sales – collect a 2.5% retail sales tax; 2% portion collected in GF, while the 0.5% portion is dedicated to the CC Fund. Budgeted $6.8M for the 2% portion in the GF, trending on budget. Restaurant – similar to retail, collect a 2.5% tax on rest/bar sales, with 2% portion in the GF. Budgeted about $1.8M in this category in the GF, also trending on budget at this time. Other Local Sales Tax comprises our smaller categories that we collect on; budgeted about $700K in this category for the GF, trending slightly over budget, about $65K, due to collections primarily in our Accommodation/Hotel category (separate from and in addition to our 6% bed tax, this would be GF’s 2% of the 2.5% we collect in this category), due to continued improvement we’re seeing in the hospitality sector of the economy. Cable Franchise Fee – also included in the local sales tax category, we collect a 5% cable franchise fee from Comcast Cable, budgeted $620,000, trending slightly above budget (about $35K) for year-end due to the growth in customer base within the Town. Overall in the Local Sales Tax category for the GF, it is estimated that we will come in over budget by about $1.1 million based on these observed trends. 8 GENERAL FUND REVENUES (continued) For Licenses & Permits – budgeted $2.1M and estimate that we will come in about $378,000 over that amount at YE, due to both commercial and residential construction activity – building and grading permits. Federal & State Grants – this category is expected to come in under budget by about $134,000 at YE, due mainly to capital-related capacity for state grants for P&R and Transit that we won’t be utilizing. These are offset w/corresponding reductions in anticipated grant expenditures w/in those departments. Other Intergovernmental – estimating come in under budget by about $113K. Due to trends in our transit reimbursements through our IGA with the RTA (ridership down a bit) and capacity we had included for a potential school resource officer at Leman Academy that will not be utilized (and that is offset with personnel savings in the Police Dept since we did not bring that position on board). State Shared Revenues – make up about 32% of General Fund, budgeted $11.6M and estimate coming in slightly under that amount (about $96K), based on figures from the League of AZ Cities and Towns with state income tax and current trends we’re observing in vehicle license taxes. Charges for Services – budgeted $2.2M, and estimate coming in slightly under by about $33,000 at YE due primarily to trends with zoning and subdivision fees (saw bit of boost last few years; those have now transitioned to permitting and construction phases). Overall, for GF Revenues, we budgeted $36.3M, and estimate coming in over that amount by about $1.1 million - reflection of development and construction activity w/in the town. 9 GENERAL FUND EXPENDITURES Total expenditures estimated under budget at year-end by 1.5%, or $568,000 Personnel savings = $274,000 No transfer out to Highway Fund = $275,000 Department capital savings = $143,000 O&M overage = $124,000 due to outside plan review Council-approved use of contingency = $75,000 for Regional Municipalities Veteran’s Treatment Court Estimated year-end fund balance = $14,593,000 39.7% of adopted expenditures Total department expenditures in GF are budgeted at $36.7M this year. Overall, we estimate coming in under budget by about $568,000 or 1.5% due to personnel savings ($274K), no tfr out the HW Fund $275K (new Pima County property tax for roads covering the residential spring surface treatments) and capital purchases $143K that were primarily tied to grant funded capacity. We’re expecting an O&M overage of about $124K due to outside plan review for several construction projects. Those expenditures are in Comm Dev & Public Works and are more than offset with the associated plan review fee revenues – with exception of that, all departments are expected to come in on or under budgeted amounts. We’ve captured the approved use of contingency reserves in the amount of $75,000 for the Regional Municipalities Veteran’s Treatment Court that was approved July 5 of last year. And overall, in the General Fund, we estimate an increase in our fund balance of nearly $1.2 million to approximately $14.6M or almost 40% of adopted expenditures. 10 Revenues HIGHWAY FUND Total revenues estimated under budget at year-end by 7.3%, or $279,000 No transfer from the General Fund ($275,000) State shared highway user revenues estimated on budget Expenditures Estimated under budget at year-end by 12%, or $595,000, due primarily to new Pima County property tax for roads Estimated year-end fund balance = $552,000 Highway Fund: Revenues: Estimated under budget by about 7%, or $279K – really due just to the transfer from the GF of $275K mentioned earlier (new Pima County property tax for roads will cover the residential spring surface treatments) Expenditures: Estimated under budget by 12%, or nearly $600K, again due to the Pima County property tax for roads for the spring residential surface treatments Overall estimated year-end fund balance about $550K 11 COMMUNITY CENTER FUND Revenues Contracted revenues estimated over budget by 2.1%, or $70,000, based on updated Troon forecast Town operating revenues estimated over budget by 15.7%, or $122,000, due primarily to member dues Half-cent sales tax revenues estimated on budget Expenditures Contracted expenditures estimated over budget by 2.0%, or $106,000, based on updated Troon forecast Town operating expenditures estimated over budget by 3.5%, or $36,000 Estimated surplus of $41,400 for current year with an ending fund balance of ($55,800) Contracted revenues – consisting of golf, food and beverage and tennis operations managed by Troon at the Community Center. – estimated over budget by 2.1% or $70K based on Troon’s updated forecast – due primarily due to golf fee revenue. Town operating revenues from the recreation and fitness operations at the Community Center…over budget by almost 16% ($122K) due primarily to member dues (classic memberships) Half cent sales tax on budget Expenditures – Contracted – over budget 2% ($106K) due to increased water use as result of warm, dry weather Operating – over budget by about $36K due to estimated personnel to meet facility’s programming needs. Will continue to monitor and adjust future budget capacity accordingly. Note overage is more than offset with anticipated operating revenues. Overall, we’re projecting an estimated surplus of $41,400 for the current fiscal year and an ending fund balance of negative $55,800. Our ending fund balance last fiscal year was about $97K, so improvement and moving in the direction we want to see. 12 Bed Tax Fund BED TAX FUND and STORMWATER UTILITY FUND Bed tax revenues estimated over budget by 13.0%, or $148,000 based on current trends Expenditures estimated over budget by $6,500, or 0.5%, due to tennis court improvements at the Community Center Estimated year-end fund balance = $235,000 Stormwater Utility Fund Revenues estimated slightly over budget by $3,000 Expenses estimated under budget by 3.8%, or $50,000, due to savings in capital infrastructure projects Bed Tax and Stormwater Utility – Bed Tax Fund – revenues estimated over budget by nearly $150K, continued growth and improvement in our bed tax revenues. Expenditures slightly over due to tennis court improvements we’ve done this year at the Community Center. Estimated YE fund balance $235K. Stormwater – revenues estimated just over budget, by about $3K. Expenses estimated under budget by $50K due to anticipated savings in capital infrastructure projects, due to being able to utilize in-house staff. 13 WATER UTILITY FUND Total revenues estimated over budget at year-end by 7.4%, or $1,139,000, due primarily to increased water sales Total expenses estimated under budget by 0.3%, or $66,000, due to personnel savings Water Utility Fund Revenues anticipated over budget by more than $1.1 million, due primarily to increased water sales (again, as mentioned when discussing the utility tax – increased water use with warm, dry weather) Expenses estimated under budget by about $66K due to projected personnel savings in that fund. 14 Questions? 15