Agenda 06/10/2003 - Laserfiche WebLink

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with the remainder helping to offset monthly cash flow needs. Cash flow is an important financial management issue because the majority of our revenue comes to us as either reimbursement from the state and federal governments or from the payment of local taxes (real estate, personal property, business hcense, etc.) which are staggered throughout the year. With this in mind I am please to report that the FY '03 fund balance projection of $1,864,936 is estimated now to increase by an additional $1,112,553. Thus the projected June 30, 2003 fund balance is expected to be approximately $2,977,489. This positive projection can be attributed to the mid-year budget adjustments made by the City Council, several revenue categories exceeding projections (primarily in the Electric Fund) and a slow down in spending by all City departments. Likewise, the positive variance in the June 30, 2003 fund balance will roll forward and enhance the projected June 30, 2004 fund balance which is estimated to be $3,911,615. Although we are obviously pleased with this occurrence, we remain aware of the instability of state revenue estimates along with the slow recovery of the national economy and will manage the budget accordingly. We also acknowledge that the City's projected fund balance is not the same as "cash balance" which is a key factor in the management of our cash flow in order to meet our monthly obligations. Transfers: Directly related to the discussion regarding fund balances and cash flow is the issue of "transfers" from the Enterprise Funds to support the revenue needs of general government operations, capital maintenance and the purchase of equipment. In this regard we are recommending a transfer from the Enterprise Funds for FY '04 which totals $10,731,189, a decrease of $1,897,238 or 15% less than the current year's expected transfers of $12,628,427. As mentioned earlier, we are working toward the goal of transferring no more than the positive net income from these funds in order to be able to reduce the need to borrow funds to maintain these capital assets in good operating condition. One-Time Savings and Unanticipated Revenues: As noted in the goal statement above, approximately $618,416 of the FY '03 projected fund balance is attributed to one-time savings and the receipt of unanticipated revenue. To maintain the integrity of the proposed FY '04 budget plan, I am recommending that the following revenue increases be adopted. Cigarette Tax- $0.20 per pack---Estimated Annual Revenue of $200,000 Transient Occupancy Room Tax- 2%--Estimated Annual Revenue of $15,000 Tangible Personal Property Tax on Vehicles--Increase from $1.92 to $2.30--Estimated Annual Revenue---S238,000 Total New Annual Revenue from these tax sources--S453,000 We believe, based on the presentation made to the City Council by the Commissioner of the Revenue regarding the latest real estate reassessment, that the remaining $165,416 will come