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Conway finance report: April sales tax down; city faces roughly $1.5 million budget gap if trend continues
Summary
Finance staff reported April sales tax down 1.9% month-over-month and 3.6% year-to-date; the city is monitoring revenues and maintaining a spending freeze. Council approved the April financials unanimously.
Finance staff warned the Conway City Council on May 27 that sales-tax revenues are down and that continued declines could create a sizable shortfall.
Tyler Wenningham, speaking to the council, said April sales tax collections were down 1.9% compared with April last year and that for the fiscal year to date collections were down about 3.6%. "If the current trend continues, we're gonna miss our sales tax budget this year by 1 and a half million," Wenningham said.
The nut graf: sales tax is the city’s largest single revenue source, and staff are operating under a strict spending freeze and reviewing each departmental purchase to limit nonessential spending.
Wenningham said the city had budgeted for 3% growth but actual receipts are negative; other revenues such as parks and rec and airport fuel sales were performing better, with airport fuel up about 23% year over year. He and other council members stressed monitoring and caution: "We're headed for a challenging year," Wenningham said; Mayor and council members noted the trend mirrored statewide patterns.
Council discussed project and reserve funds as part of the fiscal picture. Wenningham reviewed the project-fund balances printed in the packet: the pay-as-you-go street sales-tax fund (major-street projects) had just under $14 million at the April snapshot; the 3/8-cent street-sales-tax balance was nearly $19.5 million; parks impact and street impact fee accounts had balances the packet listed as roughly $400,000 and $2.5 million respectively. He said most balances have specific planned projects tied to them and that American Rescue Plan Act funds remaining were nearly exhausted, with a small outstanding shelter item to complete before the federal spending deadline.
After the presentation, a motion to approve the April 30 monthly financials carried 8–0.
Ending: Council approved the financials for publication and will continue monitoring sales-tax trends; the administration is keeping a strict spending posture until revenues stabilize.
