2006 BUDGET (353 pgs) - Laserfiche WebLink

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Sales tax is the largest source of revenue for the City at 37% of total revenues with charges for services as the runner up at 33% of total revenues. The sales tax revenues have begun to level off since 2004 as a result of increased retail competition in neighboring municipalities. In 2005, the City has seen a decline in three other sectors: grocery stores, general merchandise and home improvement stores. Lodging and restaurants showed slight growth in 2005 with the telecommunications sectors growing at 15% over 2004. The City will meet and actually go above its 2005 budgeted goals by approximately 2%. This increase was primarily due to over $450,000 of additional revenue collected through special sales tax audits and received prior to the end of the year in 2005. However, before the collection of this one-time revenue, the City was projected to fall short of its budget by 2% and had experienced no growth in sales tax dollars from 2004. The sales tax projections for 2006 are $9,876,887 which is approximately 3.0% down from the 2005 budget. The decline is due mostly to a shift in regional sales tax dollars as competition continues. In addition, the City expects revenue leakage to Boulder, Colorado due to the opening of a new home improvement located in central Boulder in January of 2006. Sales Tax History (1999-2006) $10,200,000 $10,000,000 $9,800,000 $9,600,000 - $9,400,000 - $9,200,000 - $9,000,000 - 00 0o O� el• 0o et` O� ecO Nc) qO �O �O 'O rO :O �(1,O Qco� 0 In 2005, the City began to reduce its focus on capital projects and increase its focus on operations by shifting $595,004 or approximately 6% of the total sales tax revenue historically allocated to the Capital Projects Fund back to the General Fund to cover 2005 increased fixed costs. In 2006, this focus continued and the City transferred another 2% or $200,000 to invest in business retention and development and to help fund the additional costs needed to operate the new 32,500 square foot library. With this new allocation, the city still allocates 1.14% of the total 3% collected for the Capital Projects Fund and the remaining 1.86% for the General Fund. This allocation meets the requirement set by voter approval that a minimum of the 33% or 1% of the iii