The city published its 2009 second quarter financial report earlier this month, showing that revenue and expenditure numbers were on target for the year. The second quarter ended on June 30.
According to the report, “Given the current recession, the General Fund ended the second quarter of 2009 in reasonably good shape.” Total actual revenues were “slightly behind,” and total actual expenditures were “significantly below” the 50 percent budget threshold. The revenue shortfall for 2009 is projected to be $1 million, yet Finance Director Chip Corder does not anticipate needing to tap the city’s $2.34 million “Rainy Day” fund. Rather, he believes that the city can address the shortfall through expenditure savings and using the General Fund’s $300,000 revenue stabilization reserve.
Comparing total actual to total budgeted revenues (which excludes the beginning fund balance and transfer from other funds) through June 30, the General Fund is 47.9 percent of budget for quarter two, versus 54 percent of budget for last year’s second quarter.
According to Corder, the “slight revenue shortfall” is primarily a result of weaker than projected sales tax, development fees and investment interest. The report includes a table that represents these numbers.
Total revenues for June 30 were $11 million, as compared with $11.5 million for June of last year. This represents a decrease of about $473,000 or 4.1 percent, primarily due to extraordinary sales tax receipts in 2008 and reductions in construction-related sales tax, development fees and investment interest.
As always, property tax made up the biggest portion of revenues: $5.1 million for June 2009 as compared with $4.9 million in 2008. Sales and utility taxes were second and third in terms of revenue, earning $1.3 million and $1.8 million as of June 2009, respectively. Sales tax is 38.9 percent of budget in 2009 compared to 73.5 percent of budget in 2008. Actual revenue is down about $751,000, or 37 percent.
Utility taxes, which apply to private utilities only, are 51 percent of budget in 2009, compared with 54 percent of budget in the prior year.
Comparing total actual to total budgeted expenditures for the second quarter, the General Fund met 45.4 percent of budget in 2009, compared with 49.1 percent of budget in 2008. This is a direct result of position vacancy savings, spending freezes that have been put in place in response to the recession, and departmental efforts to “hold the line” on expenditures.
Salaries and benefits make up the biggest expenditure categories. The city spent $5.4 million on salaries as of June 2009, compared with $5.8 million last year. Benefits, however, increase. In June 2008, the city put $1.7 million toward benefits. This year it spent $1.8 million on benefits. Insurance ($630,500 for June 2009) and contractual services ($640,227 for June 2009) made up another significant portion of city expenditures.
This article only includes revenue and expenditure excerpts from the city’s 2009 second-quarter financial report. The full document, which includes an update on CIP projects, can be downloaded from the City Council’s Sept. 8 agenda, at www.mercergov.org.