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Second quarter financial update shows promising outlook for city’s budget

By Natalie Anderson
natalie.anderson@salisburypost.com

SALISBURY — Finance Director Shannon Moore on Tuesday delivered promising news about the city’s finances through the month of December.

At Tuesday’s city council meeting, Moore updated members on the 2020-21 fiscal year’s second quarter financial report, which includes October, November and December.

Overall, the city’s revenue and expenses are “on target” for this time of year, Moore said. As of December, the city has received 49.5% of the $50.09 million revenue budgeted for the general fund. That rate rises to 52% when the $2.56 million carried forward from the previous fiscal year is not included. Expenses are currently at 45.68%, which shows some savings due to less travel to conferences, Moore added.

Property tax and sales tax revenues, which are the two major sources for the general fund, are currently on track to exceed the 97% collection rate budgeted for the 2020-21 fiscal year. Currently, the city has collected 94.22% of property taxes as of January. Moore said the city could see a surplus of $251,000 in those revenues if the 97% collection rate is reached, and as much as $430,000 if the 97.88% collection rate seen in 2019-2020 is received.

The city’s sales tax receipts are still “very strong in comparison to what we had actually planned for the year,” Moore said. A total of 30.11% in sales tax revenue has been received, which amounts to $3.83 million. By contrast, the amount collected was $3.56 million by this same time in 2020 and $3.33 million in 2019. A total of $7.65 million was budgeted to be received in the 2020-21 fiscal year.

Moore added that economists are still unsure of what the full impact to sales tax revenue will be for the remainder of the year, saying that some predict “the bubble will burst” soon while others say the impact won’t be seen until next fiscal year. As of now, the city is expected to surpass the revenue budgeted.

“If we do not continue to see a slow-down, we could be as much as $800,000 to a million dollars over budget for the sales tax side of the budget,” Moore said.

Other surpluses include $50,000 in ABC revenues and between $30,000 to $40,000 in cemetery revenues in the general fund.

The city does anticipate some losses, however. Moore said the Powell Bill revenue received is currently $43,000 below what was budgeted. Additionally, Parks and Recreation revenue is expected to be under budget by $80,000 to $90,000 due to prolonged closures during the pandemic.

Interest earnings are also expected to be down by about $40,000 to $50,000 even after budgeting for 68% less in earnings for the 2020-21 fiscal year.

“Interest rates are extremely, extremely small right now so we’re just not earning a lot of interest revenue on our idle cash,” Moore said.

Additionally, “environmental protections” expenses, which includes solid waste and cemetery expenses, are currently at 51%, which Moore attributes to the increased tonnage seen at the landfill as more people stay home.

Of the $2.33 million adopted in the stormwater fund, the city has collected 49.77% of that revenue, while expenses are at 29.33%. Moore said some money carried forward from the previous fiscal year has not yet been allocated to projects, which accounts for the low expense rate.

Of the $26.39 million adopted in the water and sewer fund, revenue is currently at 53.66% while expenses are at 36.73% as most larger projects aren’t completed until the end of the year.

A total of $1.49 million was adopted in the transit fund, and revenue is currently at 33.83%. Moore, however, isn’t concerned as the city plans to use $549,816 in federal CARES Act funds to offset some expenses and anticipated lost revenue from the ticket sales. The transit fund is currently at 34.53% with expenses, with some cost-savings expected due to the operation on limited hours.

In the Fibrant fund, which primarily contains the city’s money from its Hotwire lease, 44.32% of the $3.78 million anticipated revenue has been received. Expenses in this fund are currently at 9.84%.

A total of $2,933 has been allocated to Rowan Helping Ministries from the city’s Share2Care Water and Sewer Assistance program. Moore said donations have slowed down recently, and a little more than $100 is currently in the fund. Allocations are made to Rowan Helping Ministries once the fund reaches $1,000 in donations.

Contact reporter Natalie Anderson at 704-797-4246.

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