By Sheryl Hamlin
The first good news about the FY 19/20 mid-year budget was its timeliness. February 19, 2020 is a record in reporting the mid-year which ended December 31, 2019.
Cristy Ramirez, Finance Director, created a new format for the presentation. It was concise in that the tables grouped the data logically, but imprecise in that after the approvals for the requested changes, council had no idea it was approving a deficit budget in the General Fund. The chart below provided by the Finance Director confirms this action.
Note that the General Fund can absorb this negative and council has the authority to create a deficit budget, but in light of the fact that sales tax projections are probably $200,000 BELOW budget due to store closures, this deficit could deepen by year end. The current sales tax receipts show $2,485,640 or 43% of the budget at mid-year. Furthermore, it was noted in the discussion by Council Member Crosswhite that the expectations for retail in the east end of town are “less than expected”.
The property tax shown in the staff report of $3,715,880 was not broken down by real property tax and tax in lieu of Motor Vehicle fees. Director Ramirez clarified this subsequently as follows. The increase of $66,000 to this category was for the In Lieu swap rather than the real property tax.
Total Property Tax……………………………$3,715,880
Property Tax in Lieu of Motor Vehicle Tax…$2,875,000 See article for description
Real Property Tax…………………………….$ 840,880 Reflects 79% to VCFPD: see recent TRA Report
There was also discussion about the increased building permit revenue. Council Member Crosswhite pointed out that at some point this would diminish and other revenue would be necessary, suggesting the Economic Development Department step up to the plate.
This of course is not the first time the council was admonished to find other revenue. The City’s former Financial Advisor Dr. Gartner said similarly: “development projects should never be considered on-going revenue”.
On another positive side, Director Ramirez found about $1 million “unassigned” in the General Fund. She was recommending this $921,300 be moved to the General Fund Reserves bringing that category near to 10% which is a near-term high.
Director Ramirez directed me to the Audited Financial Report for FY 18/20 where it shows a large unassigned balance in the General Fund at pdf page 6.
City Manager Singer said that at a subsequent meeting, they will be returning with language to “tighten up the reserve policy language”.
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