Budget update and mission critical appropriations requests presented at Mayor's Counsel Meeting
The April Mayor’s Counsel meeting was held today at Fire Station 18. Members of City Council were presented with “mission critical” appropriations requests by Chief of Staff Laura Neumann, Fire Chief Rich Brown and Police Chief Pete Carey. (see attachments) 2011 Financial Update and Counsolidated Supp. Apprropriations.
The Budget Department also presented preliminary 2011 End of Year Financial Updates along with first quarter performance.
Based upon current pre-audited figures, the 2011 General Fund Balance grew by $6.8M due to approximately $1.1 million in revenue exceeding budget and $5.7 million due to expenditure savings. Expenditure savings are largely due to salary and benefit savings from vacant positions. In addition, required reserves declined by $1.9 million, in part because the $2.4 million debt service reserve is no longer required with the refunding of three Certificate of Participation (COP) issues. In sum, the 2011 General Fund end-of-year available fund balance grew by $8.7 million to 17.34% of the 2012 General Fund expenditure budget.
With only a few months of data, the preliminary 2012 financial update is based upon the current results of the sales and use tax forecast models compared to budget. Because of the lag in sales tax collections, the information we have to date is based upon the April Sales and Use Tax Report which is February activity collected in March, reported in April.
To date, activity has been stronger than the assumption upon which the 2012 budget was based. At this time the models predict sales and use tax revenue will likely exceed the budgeted amount by approximately $4.9 million to $6.8 million, depending upon the probability assigned. We caution however, that we only have two months of 2012 activity and the model has been moving sharply up and down over the past few months –sharply up after the most recent unusually positive report.
In addition, there are significant risks to this forecast which have yet to be captured by the models, including increasing fuel prices and the impact high prices might have on consumer spending and an economic recovery that continues to flag with recent disappointing employment figures.