Hoover reports 9-month revenues ahead of budget pace; sales and SSUT remain largest tax sources

City finance staff presented the Hoover City Council with a nine-month financial and revenue update on Aug. 25, reporting revenues generally ahead of the planned pace and noting areas to watch as the fiscal year closes.

Finance staff (identified in the meeting as Miss Cornett) said tax revenues of $118 million represent about 83% of the city’s budgeted tax revenues at the nine-month mark, while total revenues reported were $146,000,000 (85% of the budget). Staff emphasized the general fund remains the primary operating fund and cautioned that a reported $26 million excess in the general fund at this point will likely decline as the final three months of expenditures are recorded.

Presentation highlights included: - Tax revenue composition: Sales and use taxes make up about 74% of tax revenue (for the chart presented, the simplified seller use tax — SSUT — was grouped with sales taxes). When all taxes are grouped, total tax revenues were about 81% of the city’s total revenues to date. - SSUT trends: SSUT collections are increasing as more purchases shift online; staff said SSUT grew faster than traditional sales tax collections, and noted SSUT yields a lower pro rata share to the city (stated as 2.4% via SSUT versus 3.5% for in-person retail sales in the city). Staff described this shift as a continuing challenge because the city receives a lower percentage on SSUT-collected transactions. - One-time / special items: The special revenue column included $166 million in actuals tied to opioid settlements the city has received (presented as part of special revenues in the packet). Grant contributions were reported at $73 million in the packet figures explained in the presentation. - Grocery tax: Staff located grocery sales tax detail during the meeting and reported grocery tax collections to date as $13,000,002.82; monthly grocery tax receipts range from about $1.2 million to $1.6 million, with June noted as an unusually high month. - Expenditures: Debt service to date was noted at a little over $17 million; public safety accounts for 39% of general fund expenditures to date, general administration 17%, parks and recreation 12% and highway/roads 9%.

Staff also provided month-to-month and year-to-date comparisons showing modest increases across categories: sales and use tax up roughly 3.67% year-to-date compared with the prior year for the same period, and SSUT up about 13% for the same period. Real property taxes were at about 97% of budget for the year.

Staff said bank reconciliations through June had been completed and July’s figures were in process; they offered to provide a grocery-tax breakout to council members who requested it.

Quoted from the meeting: Miss Cornett said, “The $118,000,000 that we have in tax revenues represents 83% of the budget that we had for tax revenues.” She also noted, “Grocery tax ... right at a little over $13,000,000 in grocery taxes.”

Council members asked clarifying questions about grocery tax reporting, and staff said grocery tax historically was included within sales tax but that reporting improvements now allow grocery to be separated for tracking.