Fayetteville reports modest sales-tax gains; building permit revenue plunges in February

Stephen Dotson, Fayetteville’s chief financial officer, told the City Council on April 1 that the city’s January 2025 sales-tax receipts (collected in February) produced mixed results: city sales tax was up about 1.95% from January 2024 while the county share to the city rose roughly 8.34%, producing a combined month increase of about 4.74% and a year‑to‑date combined increase of roughly 6.7%.

Dotson said the General Fund’s January receipts were about $180,000 (5.5%) higher than the same month last year and up about 7.3% year to date. Compared with the January budget, city sales tax was about 1% under budget while the county portion was about 5.19% over budget, producing a combined monthly variance of about 1.69% above budget. “When looking at the sales tax numbers on a year to date basis compared to budget, we're up a combined 3.6% or roughly $346,000,” Dotson said.

The finance director combined the sales-tax and monthly reports for the meeting. He told council that February general‑fund revenues were only slightly above expectations overall, but that declines in specific lines drove notable swings. “Our franchise fees [were] down approximately 6%,” Dotson said, and “we saw a reduction, pretty significant, in our building permits. We were down about 52%.” He added the new permit fee schedule the council recently approved had not yet taken effect and staff expects several large commercial permit applications in coming months that could offset February’s shortfall.

Other funds showed varied performance in February: the street fund ended roughly 2% below budget after a 4% reduction in state turnback was partially offset by roughly $24,000 in increased interest revenue; the parking fund was about 3% below budget as declines in fines and fees were offset by higher interest earnings; the Parks Development Fund outperformed expectations, up about 12.3% driven by higher charges for services and interest; the water and sewer fund finished about 1.2% below budget with billing and penalty revenue down roughly 4%; and the recycling and trash collection fund finished about 16% above budget driven by higher franchise fees and charges for services.

Dotson also reported a large decline in airport sales (down roughly 28%) even though airport operations rose compared with last year, and he said timing differences in fuel sales vs. revenue posting likely explain that mismatch. Overall, Dotson estimated the net effect of the processor fee and transaction mix on customers would be small and invited council questions.

Mayor Ron and council members did not take substantive policy actions after the presentation; Dotson said staff would continue monitoring monthly trends and pursue the commercial permit pipeline that may mitigate the February permit shortfall.

The financial presentation combined the January sales-tax report (revenues recorded in February) with the monthly financials for February 2025; Dotson said staff will continue issuing that combined format.

Dotson concluded, “I’d be happy to take any questions at this time,” and no further action was taken on the report.