Dillon balances 2015 budget following huge spike in July sales tax revenues
Earlier this month, the Dillon Town Council reviewed a first draft of the proposed 2015 budget, which showed expenses outpacing revenues by about $36,000.
At the time, during the Sept. 2 town council work session, finance director Carri McDonnell wasn’t worried about the preliminary budget being unbalanced, saying she was confident revenues and expenditures would level out once she received sales tax data for July and August.
On Tuesday, McDonnell reported to the town council she received the July numbers, which came in 9.9 percent, or about $45,000, above budgeted projections. That boost in revenue, coupled with reductions in worker’s compensation premiums, injected more than enough revenue into the town’s coffers to ensure the 2015 budget is balanced going into next year, McDonnell said.
Although McDonnell’s prediction that the budget would be balanced before the end of the year was confirmed just weeks after she made it, council members at the time had a lot of questions about how she could be so confident.
More than two decades of experience and still uncollected revenues for the third and fourth quarters may have played a part, but on Wednesday McDonnell admitted she doesn’t own a crystal ball and said nothing is certain when trying to forecast revenues. She credited her confidence two weeks ago to conservative budgeting.
Aside from recession years, McDonnell said she typically projects sales tax revenues to increase year-over-year during the winter and some summer tourism months. Beginning in July through the end of each year, McDonnell generally projects sales tax revenues to come in flat compared to the previous year.
Conservative budgeting in July may seem extra cautious, considering the Fourth of July holiday is traditionally one of the biggest tourism weekends in Summit County as well as efforts by the town to beef up its summer events schedule, including the summer concert series. But, as is the case with the winter, McDonnell said summer tourism activity thrives or dies with the weather.
The weather mostly lived up to its end of the deal, but McDonnell said revenues spiked due to an improving economy and the fact that July also happened to be the first month the town collected sales tax revenue from its newest retail store — Petco — which hosted its grand opening during the middle of the month.
Looking ahead to the rest of the year, McDonnell said she doesn’t expect future monthly sales tax revenues to spike the way they did in July. Even if they do, the 2015 budget likely won’t change much before the end of the year, McDonnell said, noting that any surplus revenues would be rolled into the fund balance to pay for future projects or emergencies.
In addition to announcing next year’s overall budget will be balanced, McDonnell also presented draft budgets for Dillon’s enterprise funds, including the water, sewer and marina funds.
Although water and sewage usage is projected to remain flat compared to 2013 and 2014, McDonnell is predicting a 1 percent increase in water and sewer rates in 2015.
The town annually reviews its water and sewer rates, McDonnell said, and hires an engineering firm every five years to conduct a rate study to investigate if the town’s expenses justify the fees it charges customers. HDR, Inc. is performing the rate study for this five-year cycle, McDonnell said, and is scheduled to deliver its draft report to the town council during its Oct. 21 work session.
Shortly after, town officials will schedule a meeting to present the report to the public.
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