Oswego finance director reports first-quarter surplus, sales-tax growth and delayed $20 million bond sale for Lake Michigan connection

The Village of Oswego received a positive first-quarter financial report on June 10, with the general fund showing a surplus and sales tax continuing year-over-year growth, Finance Director Andrea Lambert told the board.

Lambert reported general-fund revenues of approximately $7.5 million and expenditures near $5.4 million for the three-month period, producing an ending surplus of about $2.0 million. She said the village’s annual budget shows a planned, one-time deficit of $575,000 because of a transfer from the general fund to the capital fund for the public works facility; excluding that transfer the operating budget is balanced for the year-to-date period.

On major revenue lines, sales tax totaled about $3.6 million (roughly 30% of budgeted annual sales-tax receipts), local government distribution funds were near target and building-permit and food-and-beverage tax revenues were at or slightly above the one-quarter mark. Lambert noted interest earnings were above budget because the village budgets conservatively and interest rates remain elevated.

Lambert also reported on the water and sewer operating fund: three-month revenue was just under $3.0 million, expenses just under $1.5 million and a surplus of approximately $1.48 million. She said the budgeted year surplus for that fund is about $4.5 million and reminded the board the large planned surplus relates to spending anticipated for the Lake Michigan connection and associated rate adjustments to prepare for future debt service. She said a $20 million bond sale originally set for mid-June has been pushed to July; that bond is intended to cover roughly six months of planned Lake Michigan connection spending.

Trustees asked whether higher water revenue reflected rate adjustments or higher pumpage; Lambert said it was a combination of both and that bi-monthly billing timing affects the monthly view. A trustee asked whether sales-tax growth was proportional to population growth; Lambert offered to analyze and follow up.

Lambert said one state-level change to taxation of online sales had shifted some use-tax into sales-tax receipts, which increased reported sales-tax revenue versus initial projections. She said overall the village is “comfortable” with current trends and that a six-month review will give a fuller picture of year-long performance.

Ending: Lambert told the board staff will provide additional breakdowns of revenue sources in future reports and monthly materials on the village website show line-item detail. The board received the quarterly report and had no objection to staff continuing the planned financing schedule with the revised July timing for the bond sale.