General Fund Revenue Estimates The general fund revenue estimate for the first quarter is the same as the approved FY/08 budgeted revenues, with the exception of the movement of $430 thousand in State grants. An estimate of year end FY/07 revenues is presented as an unaudited number. Trends of the revenues through the first quarter are presented and any differences from the budget and concerns are noted in the following sections. The Five-Year Forecast is being prepared, and will be presented to Council in December. It will provide detailed estimates of revenues for the current fiscal year and FY/09 to FY/12. There are a number of weaknesses in the economy at this point and forecasts of employment and construction activity both national and local are more pessimistic tan the forecasts that supported the approved FY/08 budget.. Employment growth in the Albuquerque area has slowed, from over 3% to 1%. This slowdown is led by layoffs at Intel, PNM, Advent Solar, and Eclipse Aviation. Layoffs at Sandia and Los Alamos National Labs are part of federal budget discussions. Single family construction has gone from a booming industry to a trickle. In FY/05 the average number of single family permits issued in a month was 414 this slowed to 361 in FY/06 and 204 in FY/07. Permits in September and October of 2007 moved to new lows with only 74 and 76 houses respectively. These weaknesses act to slow down not only GRT, but building permits, other construction related charges and charges related to entrance at the City’s venues. Gross Receipts Tax. GRT revenues ended FY/07 somewhat stronger than anticipated pushing up the base for FY/08. Growth for FY/07 in the one-percent distribution was 8.2% while the estimate was 7.5%. Total GRT revenue was $2.95 million or 0.8% above the estimate. The estimated growth in the one- percent distribution for the FY/08 budget was 4.3%. The first quarter growth was only 2.9% and construction GRT was down 12.3%. This slowdown in GRT is the biggest risk to the FY/08 revenue forecast. The national economy is slowing and the risk of a recession has increased. As noted above the local economy is also slowing. The Five-Year Forecast will pay particular attention to this risk. Property Tax. FY/07 growth was 6.5% and $420 thousand above estimate. The FY/08 estimate was set at 2.5% and it now appears that the tax base that collections are based on has increased 11%. The Five-Year Forecast will make a re-estimate of these taxes. Franchise Taxes. Franchise taxes in FY/07 were near expectations. Telecommunications continues to be a drag, and the warm winter in FY/06 limited natural gas use. In FY/07 prices of natural gas declined making the first nine months revenues only equal to FY/06 somewhat less than forecast. Cable franchise revenues continue to be strong and should be enough to offset the weakness in natural gas. Telephone franchise revenues in the first three quarters are inline with the flat forecast. Electricity franchise revenues are inline with their forecast. The Water Authority franchise should be near the estimate. Payments-In-Lieu-Of-Taxes (PILOT). PILOT revenues are expected to equal the FY/08 budgeted level. General Fund Revenue Estimates First Quarter FY/08 In thousands of dollars UNAUDITED 1st Quarter Actual ACTUAL APROVED FIRST QTR minus FY/06 FY/07 FY/08 FY/08 APPROVED Gross Receipts Taxes 253,565 274,763 284,303 284,303 - Public Safety GRT 34,066 36,933 38,196 38,196 - Quarter-cut to 1/8th 34,066 29,451 19,098 19,098 - Total GRT 321,697 341,147 341,597 341,597 - Property Taxes 28,605 30,452 30,782 30,782 - Telephone Franchise 3,242 3,199 3,070 3,070 - Electric Franchise 5,887 5,932 5,960 5,960 - Gas Franchise 5,494 5,606 6,422 6,422 - Cable Franchise 3,358 3,642 3,706 3,706 - Other Franchise 772 599 808 808 - Water Authority Franchise 5,203 5,164 5,195 5,195 - Sub total Franchises 23,955 24,142 25,161 25,161 - PILOT(without water) 1,465 1,510 1,570 1,570 - Building Permits 12,243 10,204 10,485 10,485 - Other Licenses/Fees 2,960 3,035 3,106 3,106 - Other Intergov'l 6,489 5,174 4,580 5,010 430 Charges for Services 19,166 18,704 19,277 19,277 - Internal Service 1,010 997 1,759 1,759 - Indirect Overhead 13,811 13,045 14,154 14,154 - CIP-Funded Positions 7,692 7,284 9,211 9,211 - Fines and Penalties* 1,802 9,199 5,632 5,632 - Other Miscellaneous 1,242 753 873 873 - Interest on Invest 3,015 3,852 3,124 3,124 - Interfund Transfers 2,140 2,591 3,987 3,987 - TOTAL REVENUE 447,293 472,087 475,298 475,728 430 Non-Recurring Revenue 12,980 18,238 22,192 22,595 403 RECURRING REVENUE 434,313 453,849 453,106 453,133 27 *Revenues will be moved to Photo Enforcement Fund in 2nd quarter 2008. Building Permits. Building inspection permit revenues for FY/07 were $281 thousand or almost 3% below the estimated actuals. This is 16.7% below the FY/06 level. FY/08 permit revenues were estimated to be at the same level as the FY/07 estimate. For the first quarter of FY/08 revenues are 8.7% below the first quarter of FY/07. Single Family permits for FY/07 were 43.5% below FY/06 with the average number of homes permitted per month at 361 in FY/06 compared to 204 in FY/07. In September of 2007 only 74 permits were issued for single family homes. Preliminary numbers for October 2007 indicate a similar number of homes permitted. Total value of permits actually increased in the first quarter, but this was due mostly to the permitting of a 198 unit apartment complex and two hotels. Other Permits. Included in this category are revenues from permits and licenses for restaurant inspections, animal control, liquor establishments, business registrations, use of City right of way, and other miscellaneous fees. These revenues in the first quarter are on track to meet the budget. Other Intergovernmental Assistance. Other intergovernmental assistance includes state shared revenues (excluding GRT), grants and county shared revenues. This category has declined in recent years due to changes in state policy and the manner in which grant revenue is received. In FY/06 revenue from FEMA increased revenues substantially to compensate the City for costs incurred related to hurricanes. Revenues in general are expected at the level anticipated in the FY/08 budget. There is an increase of $430 thousand in State grants moved from the capital fund to the General Fund. The revenue from the State for funding Corrections will also be received as the City is still funding part of the operations of the detention center. This amount will be estimated in the Five-Year Forecast. Charges for Services. Charges for services include fees charged for entry into City venues and services provided to citizens. It also includes some revenues for charges to other governmental entities. The first quarter has a decline of 2.3%, compared to expect growth in the budget of 4.3%. This is largely due to large declines in construction related revenues such as engineering fees, zoning plan checks, and filing of plats and subdivisions. In addition revenues for records search fees related to subdivisions is also down. Internal Service. Internal service revenues are expected to be at the FY/08 budgeted level. Indirect Overhead. Indirect overhead is kept at the budgeted level. CIP-Funded Positions. Revenues are in line with the level in the approved FY/08 budget. Fines and Forfeitures. The FY/07 revenues ended near the estimated level prepared during the FY/08 budget. The STOP photo enforcement program brought in $9 million. In FY/08 revenues for the STOP program were estimated at $5.5 million the level of appropriation estimated for the program. All revenues from this fund will be moved to the Photo Enforcement Fund in the 2 nd quarter 2008. There is no net effect on the FY/08 General Fund as the same amount of appropriation/expense is moved to the new fund. Interest Earnings. Interest earnings were stronger than expected in FY/07. Interest rates remained high as did fund balances. This will be looked at in light of new interest rates forecasts in the Five-Year Forecast. Other Miscellaneous Revenues. Other miscellaneous receipts for FY/08 are not changed from the budgeted level. Interfund Transfers. Interfund transfers are in line with the level in the approved FY/08 budget. Other Operating Funds Fire Fund 210 The primary source of revenue in this fund is the allocation from the State Fire Marshal’s Office. Actual revenue collected from the State for FY/08 was received in July 2007 and is $58 thousand higher than estimated. Interest earnings are anticipated to be $28 thousand above the budgeted level. Recreation Fund 215 Revenues from the cigarette tax have declined over the past few fiscal years. FY/08 revenue is budgeted at $230 thousand and it is anticipated that revenue will come in at the budgeted level. Lodgers' Tax Fund 220 Revenues for Lodgers’ Tax revenues finished FY/07 with growth of 8%. The year end FY/07 revenue of $10.798 equaled the revised FY/07 estimate. The approved FY/08 budget anticipates growth of 3.5% and the estimate is kept at this level. Only two months revenue is currently available and a forecast will be made for the second quarter revenue report. Hospitality Fee Fund 221 As with Lodgers Tax, Hospitality Fee revenues grew 8% in FY/07 exceeding the FY/07 budgeted amount but equaling the estimate. Hospitality fees are 1/5 th of Lodgers’ tax and a new forecast of Hospitality fees will be done in conjunction with Lodgers’ Tax. Open and Ethical Elections Fund 232 Revenues for this fund are comprised of one-tenth of 1% of the approved General Fund and from qualifying contributions from qualifying candidates. In FY/08, this fund is projected to reach it’s budgeted level of $885 thousand. Air Quality Fund 242 First quarter estimated revenues for the Air Quality Fund are projected to increase slightly to $2.9 million from the budgeted level of $2.7 million. The increase is due to Air Quality permit revenues which have come in over $200 thousand above the estimated amount. Most of this revenue is received in the first quarter and is therefore projected at actual for the 1 st quarter. All other revenue categories are projected at their budgeted level. Heart Ordinance Fund 243 This fund is projected to receive $124 thousand dollars, or 60% of net revenues for animal control licenses and animal permit fees in FY08. Gasoline Tax Fund 282 Revenues for the Gasoline Road Tax Fund 282 are projected at $4.87 million. Gasoline tax revenues from the state are expected to come in at the budgeted level of $4.833 million, an increase of $276 thousand over the FY/07 budgeted revenues of $4.557 million. The Transfer from the General Fund is estimated at $37 thousand. Unaudited revenues in FY/07 were $498 thousand more than anticipated and contributed to the reduction of the transfer from the General Fund of $385 thousand in FY/08. False Alarm Enforcement Fund 287 Revenues for Alarm Ordinance Fees are expected to come in at the budgeted level of $667 thousand. Interest earnings are expected at $9 thousand above the budgeted level of $18 thousand. Photo Enforcement Fund 288 There are no revenues recorded in this fund as of first quarter. All revenues are currently in the General Fund and will be moved during the second quarter. Year to date revenues earned for photo enforcement are $3,035,000. City/County Building Fund 290 The total projected revenue for FY/08 is expected to come in at the budgeted level of $3.759 million. A source of revenue for this fund is the rental of City property from the County of Bernalillo. Plaza Del Sol Building Fund 292 Projected revenues are estimated at the approved budget level of $1.410 million, an increase of $161 thousand over the budgeted FY/07 amount of $1.249 million. This revenue is derived through a transfer from the General Fund. Aviation Operating Fund 611 First quarter revenue projections for aviation operations are expected to come in at the FY/08 budget level of $69.5 million. Interest earnings are expected at $906 thousand or $406 thousand above the budgeted level of $500 thousand. Parking Fund 641 Revenue in Parking Fund 641 is budgeted at $4.104 million for FY/08. Facilities revenue is estimated at $2.657 million and projected to come in at that amount. The FY/08 estimated revenue of $2.657 million is $87 thousand more than the budgeted FY/07 amount of $2.570 million. Meter collections are budgeted at $739 thousand, an increase of $22 thousand over FY/07 and are projected at the budgeted level. Parking fines are budgeted at $631 thousand, an increase of $134 thousand over FY/07 estimated revenues, and are projected to be $631 thousand. Leased property and other miscellaneous revenues are projected at the budgeted level of $77 thousand. Solid Waste Management Operating Fund 651 Residential collections, Commercial collections, Landfill fees and Recycling are estimated to come in above FY/08 budget at $116 thousand, $531 thousand, $190 thousand and $92 thousand, respectively. Miscellaneous revenue is estimated to be $979 thousand over budget mainly due to the fuel surcharge which began in FY/06. Transit Operating Fund 661 Transit FY/08 revenues are projected to come in at $39.6 million, $300 thousand above the budgeted level of $39.3 million. The increase is attributable to an agreement with MRCOG for additional route service. While actual fare revenue is weak during the 1st quarter, the full impact of the Rapid Ride Bus System and increased demand for public transportation in general may correct this as the year progresses. Advertising revenues also appear strong during the 1st quarter, and may lead to substantially higher revenues as the year progresses. Golf Operating Fund 681 At the close of first quarter green fees continue to struggle. Year to date green fees are 1.31% above the same period for FY/07. Contributing to this slow growth is September, which was a surprisingly low generating revenue month considering decent weather. Green fees are anticipated to fall short of the budgeted amount of $3,974 million by $459 thousand. City Council approved a rate increase that will go into effect January 1, 2008. This increase should help alleviate the forecasted shortfall. Concessions are projected at the budget level of $438 thousand. Baseball Stadium Operating Fund 691 Revenues for FY/08 are budgeted at $1.729 million. Revenue sources for the Stadium Fund are lease revenues budgeted at $706 thousand, surcharge revenues budgeted at $1.0 million and other revenues budgeted at $23 thousand. Estimated revenues for FY/08 are projected to be at the budgeted amount of $1.72 million. Risk Management Fund 705 Revenues for the risk assessment are anticipated at the budgeted level of $36.2 million. Interest earnings are $1 million above the FY/08 budgeted level of $2 million. This occurs due to higher interest rates and fund balances than anticipated. Supplies Inventory Management Fund 715 Interest earnings and miscellaneous revenues are projected to be $29 thousand above the budgeted level of $96 thousand. Warehouse services are anticipated to come in at the FY/08 budgeted level of $793 thousand. Fleet Management Fund 725 The anticipated revenue for Fleet Management Services is anticipated to come in at the FY/08 budgeted level of $13.4 million. Interest earnings are anticipated to be $76 thousand over the budgeted level of $50 thousand. Employee Insurance Fund 735 Anticipated revenues for the Employee Insurance fund are above the budgeted level of $46.6 million by $692 thousand. Insurance premiums are expected to come in at $106 thousand above the budgeted level with interest earnings and miscellaneous revenue expected to exceed the budgeted level by $253 thousand. Higher interest rates and fund balances have contributed to the increase in interest. Communications Management Fund 745 Pay telephone royalties of $4 thousand and interest earnings of $58 thousand above the budgeted level account for the $62 thousand increase in anticipated revenues. Radio maintenance charges of $869 thousand and telephone administrative charges of $315 thousand are expected to come in at budget. Open Space Expendable Trust Fund 851 The FY/08 revenue budget for open space park fees and interest is $90 thousand. At the close of first quarter park fees are anticipated to reach the budgeted amount of $75 thousand and interest has already reached the budget of $15 thousand and it is anticipated that it will only grow.
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