"Thomas Jefferson said a democracy is dependent on an informed citizenry. I don't care whether it sounds corny or not. It's the truth." -Jim Lehrer
Carefree Truth
Issue #831, June 1, 2020
Issue #831, June 1, 2020
At the May 19th budget workshop, Gary Neiss presented the budget overview. The 2020/21 Fiscal Year (FY) begins in July. The first budget workshop was held on May 19th; the second one was held on May 26th. At the June 2nd Council meeting, the tentative budget (the bottom line) will be approved. At the July 7th Council meeting, the final budget will be approved.
Anticipated Revenue
Carefree's municipal revenue is derived from State Shared Revenue (SSR) and from Local Fees. Carefree does not impose a municipal property tax. SSR includes state income tax, state sales tax, Highway User Revenue Fund (HURF), and Vehicle Licence Tax (VLT), in total accounting for 25% of the incoming revenue. Local revenue includes local sales tax and user fees (rentals), accounting for 75% of the revenue stream.
The past 2 years of local sales tax revenue (STR) has exceeded the 5 year average. Defining the 5 year average is a good forecasting tool. The average revenue periods consist of the summer trough, the seasonal plateau, and the tourist bump. Historically, the tourist bump has provided sufficient revenue to build the capital reserves and the rainy day fund. This year, the pandemic shut-downs overlapped with the tourist bump.
The Town is waiting to see the impacts from the closure of non-essential businesses (resort and restaurant dine-in), vs. the potential increases in performance from essential businesses (grocery, hardware and pharma). Receipts from the Department of Revenue (DOR) have up to a 2 month delay, with greater delays expected now due to Covid 19, so the Town must forecast horizontal projections to anticipate losses.
The Conference Board maintains the metrics on consumer confidence. The sharp economic contraction and the surge in unemployment resulted in the largest recorded slump in present conditions, a 90 point decline. The consumer confidence index declined from 118 in March to a reading of 87. Economists seem to align with a recovery resembling the pattern of the Nike logo. The most likely scenario this FY is a decline in STR of $200,000-$300,000. The Town has been, and is continuing to, work with state and federal representatives and staff to seek revenue replacement.
Forecasted revenues for State Shared Revenues of $1.3 million (25%) are: income tax-$563,000 (2 year lag), sales tax-$300,000 (-25%), HURF-$260,000 (-30%) and VLT-$180,000 (-25%).
Local revenues of $3.8 million are forecasted at $2.7 million for sales tax (-25%) and $1.1 million of for user fees. STR provides 52% of the local revenue. User fees provide 23%.
Anticipated Expenses
Maintenance/Operations:
Public Safety Contracts: $2.1 million (41%)
Law Enforcement-$560,000
Emergency Services-$1.52 million
Operations: $1.4 million (28%)
Economic Development/Communications-$83,000
Public Works-$400,000
Legal/Risk-$390,000
Community Development-$260,000
General Administration-$200,000
Court-$85,000
Staff Salaries and Benefits: $1.6 million (31%)
Total-$5.1 million
Capital Projects/Assets:
Fire truck
Pedestrian crosswalks
Signage program
Street maintenance
Water infrastructure
Total: $5 million
Total budget: $10.1 million
https://vimeo.com/420902059
The second budget workshop, held on May 26th, allowed Council members to ask questions about the line item budget. Both workshops were held via Zoom. The line item budget can be viewed at https://www.carefree.org/DocumentCenter/View/3240/Proposed-Budget-FY2020-21-at-5-26-2020
https://vimeo.com/422979024
Lyn Hitchon
Prepared by Carefree Truth
Copyrighted
Visit our website at www.carefreetruth2.com If you know anyone who would like to be added to the Carefree Truth email list, please have them contact me. Feel free to share Carefree Truth with others on your list.
Visit www.carefreeazbusinesses.com to see more info about businesses in Carefree. Please support our merchants.
Anticipated Revenue
Carefree's municipal revenue is derived from State Shared Revenue (SSR) and from Local Fees. Carefree does not impose a municipal property tax. SSR includes state income tax, state sales tax, Highway User Revenue Fund (HURF), and Vehicle Licence Tax (VLT), in total accounting for 25% of the incoming revenue. Local revenue includes local sales tax and user fees (rentals), accounting for 75% of the revenue stream.
The past 2 years of local sales tax revenue (STR) has exceeded the 5 year average. Defining the 5 year average is a good forecasting tool. The average revenue periods consist of the summer trough, the seasonal plateau, and the tourist bump. Historically, the tourist bump has provided sufficient revenue to build the capital reserves and the rainy day fund. This year, the pandemic shut-downs overlapped with the tourist bump.
The Town is waiting to see the impacts from the closure of non-essential businesses (resort and restaurant dine-in), vs. the potential increases in performance from essential businesses (grocery, hardware and pharma). Receipts from the Department of Revenue (DOR) have up to a 2 month delay, with greater delays expected now due to Covid 19, so the Town must forecast horizontal projections to anticipate losses.
The Conference Board maintains the metrics on consumer confidence. The sharp economic contraction and the surge in unemployment resulted in the largest recorded slump in present conditions, a 90 point decline. The consumer confidence index declined from 118 in March to a reading of 87. Economists seem to align with a recovery resembling the pattern of the Nike logo. The most likely scenario this FY is a decline in STR of $200,000-$300,000. The Town has been, and is continuing to, work with state and federal representatives and staff to seek revenue replacement.
Forecasted revenues for State Shared Revenues of $1.3 million (25%) are: income tax-$563,000 (2 year lag), sales tax-$300,000 (-25%), HURF-$260,000 (-30%) and VLT-$180,000 (-25%).
Local revenues of $3.8 million are forecasted at $2.7 million for sales tax (-25%) and $1.1 million of for user fees. STR provides 52% of the local revenue. User fees provide 23%.
Anticipated Expenses
Maintenance/Operations:
Public Safety Contracts: $2.1 million (41%)
Law Enforcement-$560,000
Emergency Services-$1.52 million
Operations: $1.4 million (28%)
Economic Development/Communications-$83,000
Public Works-$400,000
Legal/Risk-$390,000
Community Development-$260,000
General Administration-$200,000
Court-$85,000
Staff Salaries and Benefits: $1.6 million (31%)
Total-$5.1 million
Capital Projects/Assets:
Fire truck
Pedestrian crosswalks
Signage program
Street maintenance
Water infrastructure
Total: $5 million
Total budget: $10.1 million
https://vimeo.com/420902059
The second budget workshop, held on May 26th, allowed Council members to ask questions about the line item budget. Both workshops were held via Zoom. The line item budget can be viewed at https://www.carefree.org/DocumentCenter/View/3240/Proposed-Budget-FY2020-21-at-5-26-2020
https://vimeo.com/422979024
Lyn Hitchon
Prepared by Carefree Truth
Copyrighted
Visit our website at www.carefreetruth2.com If you know anyone who would like to be added to the Carefree Truth email list, please have them contact me. Feel free to share Carefree Truth with others on your list.
Visit www.carefreeazbusinesses.com to see more info about businesses in Carefree. Please support our merchants.