City Council Agenda and Packet 2006 09 12 SP

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-. fJJj]J@[%&U GENERAL FUND HIGHTLIGHTS This is a preliminary review of the General Fund. The primary focus over the past few weeks by staff has been to pin down the revenue forecast for 2006 and the revenue budget for 2007. Now that we have completed that task, our focus over the next few weeks will be to reduced expenses. In the meantime, below is a list of fund highlights. . For 2006, the General Fund is forecasted to have a revenue shortage of approximately ($460,000). This shortage is due primarily to a (7%) decline in sales tax and a (23%) decline in use tax from automobile sales. . Intergovernmental grants are up due to the DRCOG Highway 42 and Brownsfield grant projects. The offsetting expenses are in the Planning department budget. . Staff expects a 1 % savings in salaries due to attrition and turnover. But the primary reason for this decrease is from the Business Development account. Over $75,000 was budgeted in salaries but will be spent instead from the contractual services line item. . The increase in supplies forecasted will be reviewed further in the next few weeks by the City Manager and departmental directors. Staff will work to reduce this number. . The City is expected to end 2006 with a ($500,000) decrease to fund balance. . In 2007, sales tax is expected to be $8.9 million in total. This is a (3.0%) decrease from the 2006 projected. It will result in a decrease of sales tax revenue allocated to the General Fund of ($180,000). . Staff has transferred over $440,000 of sales tax dollars from the Capital Projects Fund in 2007. This makes the allocation of sales tax between the General Fund and Capital Projects Fund at 67% and 33% respectively. This offsets the ($180,000) shortage projected from 2006 to 2007 by increasing revenues for sales tax by $260,000 over 2006 projections. . Based on preliminary information provided by the Boulder County Assessors office, the property tax revenue increase for 2007 will be minor. . Staff has included a 3% increase in personal costs over 2006 budget. . No new positions are recommended for 2007. . No final decisions have been made about total staffing levels for 2007. . Operating expenses for 2007 will be reviewed individually by the City Manager and departmental directors . Given these and other budget issues, the "Gap" between revenues and expenditures for 2007 is currently $748,899.