City Council Agenda and Packet 2006 06 27 SP

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PACKET COUNCIL COMMUNICATION TO: CITY COUNCIL FROM: WILLIAM A. SIMMONS CITY MANAGER DATE: JUNE 28, 2006 SUBJECT: 2006 REVENUE AND EXPENSE FORECAST ORIGINA TING DEPARTMENT: FINANCE Background: Attached to this communication are individual reports by City fund. In each report there is a column summarizing the 2005 results. This is reconciled to the 2005 Comprehensive Annual Financial Report. The next column is the 2006 approved budget and the third column is the 2006 forecast. In some cases, the original approved appropriation by fund for the 2006 budget was amended by a supplemental appropriation during 2006. If this occurred, a reconciliation will be located in the report showing the amended approved budget. Below is a highlight of each significant fund and what staff anticipates will occur in each fund by the end of the year. These forecasts are subject to change and are currently based on actual data of five months and proj ected data of seven months. General Fund: Revenue in the General Fund is expected to end up at 96% of budget by the end of the year. The City is estimating a $525,000 shortage in sales tax revenue when compared to budget. This amount is spread between the General Fund 55%, Capital Projects Fund 34% and Land Acquisition Fund 11 %. As a result, the General Fund may notice a shortage in expected sales tax of ($290,588) by December 31,2006. Other significant shortages in revenue are in auto use tax collections. The staff believes that based on prior year collections and results from other surrounding cities that this decline will result in a shortage of($124,759) by the end of the year. Staff would like to point out that only four months of sales tax information has been collected for 2006. The steep decline in the home improvement centers collections of (29.1 %) when compared to last year for the first four months of the year could be the signal of long-term trend. There is a distinct possibility that the estimated sales tax shortage of $525,000 could be more rather than less by the end of 2006. Expenses in the General Fund have historically been between 98% and 99% of budget. Therefore, based on this trend, staff has predicted the same for 2006. This results in an estimated savings of ($131,438) in expenses. The net result is a ($385,921) shortage of revenue over expenses for the General Fund for 2006. Northwest Parkway: Construction in this fund in complete. The City expects to expend $479,000 during 2006. This leaves a remaining balance of over $.9 million in the fund balance. IE SUBJECT AGENDA ITEM 2006 REVENUE AND EXPENSE FORECAST PACKET