With the city budget now halfway complete, Thompson reported several of the city revenue lines are running well below budget.
“It’s obviously not surprising we are running below budget and also against the prior year,” Thompson told the city council during Monday’s remote council meeting. ”
According to Thompson, Board of Public Utilities‘ PILOT payments trail budget expectations by about 5%, or $100,000 through for the first two quarters of the year. BPU Electric, Water and District Heat are also below budget, while Waste Water and Solid Waste are running slightly ahead.
Other notable revenues that are trailing prior year include parking meter and violations, which are down 48% ($97,000 below budget); fines and court fees, which are down 60% ($30,000 below budget estimates); and mortgage tax, which is down 11% ($9,000).
Thompson also said he received a last-minute report from the county on the sales tax revenue figures for the second quarter, and those numbers also show a significant drop, though not as bad as what had been expected.
“We are going to be down 13.4% (for the 2nd quarter) compared to the last year, which will put us down about 2.5% on a year-to-date basis, compared to last year, so it’s not down as nearly as much as we had originally anticipated,” Thompson said.
For the 2020 $36.6 million budget, the city had planned to receive $6.5 million in sales tax revenue for the year.
Thompson added that state financial aid for road and street construction – known as CHIPS funding – was also cut by 20% due to the financial challenges in the state budget brought on by COVID-19, but the city has already adjusted its road construction plan for the year to accommodate for the reduction. He also added the state has not yet disclosed whether the city’s general municipal aid will be reduced, or by how much. That aid includes $1 million in additional supplemental money the city is set to receive from the state financial restructuring board.
As for expenditures, Thompson said salary accounts are in line with the city budget for the first six months the year and the city is on track
to deliver Phase 1 of the City Budget Financial Restructuring plan that was approved by the city council last month. However, he also said there are a few departments that we will need to monitor closely going forward. In the month of June, the Fire Department experienced significant overtime costs as a result of multiple fires. Also, the city has three unbudgeted retirement buyouts, one in the Assessor’s office and two upcoming in the Police Department.
As compared to the same time-frame last year, health insurance claims are down about 8%. Because claims are so volatile on a month to month basis, Thompson said he remains cautiously optimistic the city will be within budget for the full year.