Budget report reveals encouraging finds

June 3, 2010

By Tim Pfarr

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City staff released the first-quarter budget report for 2010, which shows an increase in development that may be indicative of a coming economic recovery.

However, sales tax is down, and Director of Finance Christine Olson said some of the first-quarter results are not indicative of a city’s overall financial health, as major expenses, such as public safety, have not been paid, and major revenues have not yet been collected.

Development revenue in the first quarter was almost $113,000, 52 percent of what the city had budgeted for the year. In 2009, the city collected only about $22,000 in development revenue in the first quarter.

Building-permit revenue was also off to a great start this year, with first-quarter revenue at almost $47,000, 72 percent of the amount budgeted for the year.

Also, revenues exceeded expenditures.

“Spending is really controlled right now,” Olson said. “We’re being very cautious.”

Sales tax revenue in the first quarter was just more than $142,000, 18 percent of what the city had budgeted for the year. At this rate, sales tax revenue will fall short. The report suggests that one reason for the shortfall is the absence of construction projects that yield sales tax revenue.

At the end of the first quarter, the city had collected more than $619,000 in general fund revenue, 11 percent of the amount budgeted. However, Olson emphasized that the number should not be cause for concern, as major revenue sources are not due until the second quarter.

Also, the city spent almost $729,000 from its general fund, about 12 percent of the amount budgeted for the year.

At the end of the first quarter, the city had collected more than $2.5 million in capital fund revenue, 91 percent of the amount budgeted for the year. Olson said that is not particularly noteworthy, as reimbursements for last year’s grants accounted for most of the money.

Furthermore, the city spent just more than $800,000 from the capital fund, almost 29 percent of the city’s budgeted spending from this account for the year.

Councilman Sonny Putter said the first-quarter budget report seems to represent a continuing trend from last year.

“I think it’s too early too get excited about new construction,” Putter said. “One data point does not make a trend.”

Deputy Mayor Steve Buri said the city is better off now than it was last year.

“We’re off to a good start,” he said, adding that was accomplished without making any cuts to services. “It’s a little too early to suggest that it’s a trend.”

Mayor John Dulcich said the city is holding its own.

“Until we get the second-quarter report, there’s no reason to make any adjustments,” he said.

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