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Finance update: sales tax near budget; use tax timing and county software change flagged
Summary
Finance staff reported general fund revenues are tracking near budget, sales tax growth is slightly down year-over-year but recovering, use tax timing is later this year, and county software changes may affect real estate tax clawbacks.
Finance staff briefed the committee on the city’s general fund through Jan. 31 and said revenues overall are tracking close to budget. Sales tax was reported as down 1.68 percent from budget in an earlier 12‑month view but later showed improvement as additional November payments were posted.
The finance director said use tax growth has slowed and the “waterfall” of use‑tax receipts that fund certain police and capital accounts had started later this season than in prior years. Staff are monitoring the flow of funds and noted that part of the difference in year‑to‑date figures reflects timing of receipts rather than permanent declines.
Staff flagged a concern about potential real estate property tax clawbacks; the finance director is working to quantify exposure and said the county is completing a financial software change that city staff hope will prevent similar clawbacks in future cycles.
On expenditures, several departments were slightly above expected YTD percentages: the city manager’s office (due to split allocations across funds), the police department (salary adjustments and timing of reimbursements), and the fire department (overtime). The new property‑tax‑backed police sales tax (Prop PD) disbursements were said to have started arriving, and staff are finalizing how that will appear in future packets.
Other funds discussed included the CDBG fund and Graham Fund; staff noted negative fund balances on paper are often timing issues tied to when reimbursements arrive. Marijuana sales tax receipts were reported at about 4.41 percent of budget at the time of the presentation.
The finance director said she expects to present departmental budget requests and the overall proposed budget in the usual annual cycle: departmental submissions and internal review in late winter/early spring, a council presentation in May (study session) and final adoption at the June council meeting. Staff cautioned that revenue forecasting remains conservative given ongoing economic uncertainty.
