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Finance director: switch to quarterly tax payments complicates year-to-year comparisons; city monitoring revenues
Summary
The finance committee reviewed September financials and discussed the switch to quarterly tax payments, building permit revenue sensitivity and lower-than-expected interest income; staff said they will reassess trends in November and meet with fire districts to check cash flow.
The City of West Haven's finance staff reported on Sept. financial results and told the council on Oct. 14 that a recent change to quarterly tax payments makes direct year-over-year comparisons difficult and will require additional analysis in November.
"Through the month of September, we collected 36.52% of our overall revenue budget, through the first quarter," finance director Michael Gormey told the committee, noting most tax collections come via mortgage companies and that some mortgage payers continue to submit half-year payments rather than quarterly ones.
Why it matters: The transition to quarterly tax payments changes the timing of recognized revenue and affects interest accruals tied to tax receipts. Finance staff said they are monitoring delinquencies, building-permit revenue (about $2 million of the budget), and interest income (budgeted at about $2.5 million), and they will report a fuller assessment in November.
Details: Gormey said building permits tend to concentrate in the warmer months and that permit revenue is about $2 million of the budget. He said interest revenue is down year over year and depends on short-term investment pools and bank rates. The city recently hired a budget coordinator and a new sewer superintendent; the sewer fund currently shows no unusual issues but requires monitoring for unplanned capital repairs. The finance team plans to meet with the two fire districts to review cash flows after the quarterly-tax assessment.
Committee discussion: Council members asked how the move to quarterly payments affects interest accruals and delinquency comparisons; Gormey said staff would compare like periods (half-to-half) to produce apples-to-apples comparisons in November. Members also discussed fund balance policy (the city target is 8%) and options to cover potential shortfalls through other revenues or expenditure controls.
What the council recorded: The finance committee convened and concluded its meeting; council asked staff to provide further analysis to the full council at a future meeting.
