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Piedmont posts $1.9M favorable revenue variance in FY23'24; transfer tax trend raises concerns
Summary
Finance director reported FY2023'24 revenue exceeded budget by about $1.9 million (excluding ARPA passthrough); transfer tax receipts remained volatile and were down 27% year to date for the new fiscal year, putting approximately $500,000 at risk against the adopted budget if the trend persists.
City Finance Director Michael Scheck presented the unaudited fiscal year 2023'24 results to the City Council on Sept. 16, reporting a net favorable revenue position of roughly $1.9 million (excluding ARPA pass-through funds). Key drivers included transfer tax receipts totaling $4.1 million (above the adopted budget by $686,000 but below the prior year), higher recreation revenue linked to strong classes and camps, and investment income that beat forecasts as interest rates remained elevated.
Scheck highlighted that transfer tax remains volatile: home sales for the year were 115 versus 111 the prior year, but average sales price declined about 11% to $2.8 million. Early data for fiscal year 2024'5 shows transfer tax receipts down about 27% year'to'date, which Scheck said could translate to a roughly $500,000 negative variance for the year if the trend continues. Scheck also noted the general fund ended the year with an $8.5 million balance (about 23.7% of expenses), slightly below the city's 25% threshold.
On expenditures, department-level spending was about $909,000 less than budgeted while nondepartmental expenses (insurance liabilities, workers' compensation, actuarial adjustments) pushed some lines over. The city remains well positioned in capital and pension trust funds: the pension stabilization fund and OPEB investments posted solid returns, and staff said the city does not anticipate requiring additional contributions to the pension stabilization fund in the near term.
Council and staff discussed budget implications and asked for a concise summary of how current transfer tax trends should be reflected in the 10'year forecast and near-term operating assumptions. Scheck recommended treating transfer tax conservatively in the operating budget and using any excess for capital or reserve purposes. Council asked staff to monitor trends and report any material changes that would affect the operating assumptions for FY24'5.
