Here’s some news you don’t really want to hear. But, its the reason I pushed so hard for us to get quarterly reports from the comptroller. This is only one part of the information, and by itself, doesn’t look so good. Without the rest of the budget to too look at, its hard to know exactly what it means. Being off by $1M in a approximately $200M budget is scary, but you have to keep it in perspective and see what else is going on. Anyways, here’s a portion of an email with the bad news:
We’ve examined the General Fund revenues that have posted through the first quarter of 2008, and made some projections about what we might experience through the year. (Some of this information may have been reviewed with Alders at the May 6, 2008 budget overview meeting.) These are very preliminary, of course, given that it is still early in the year.
Currently, there are two significant revenue categories of note:
1) Building Permit Revenues: These are way down, with revenues of just over $800K posted through the first quarter. Total posted receipts comprise only 17% of the total anticipated for the year. At a minimum, we’d like to see this at 20%, or 25%. The number of residential construction permits issued in the first quarter of ’08 is 51, versus 89 issued during the same period of 2007.
So, the softening continues, and our projections suggest revenues ranging from $2.8M to $3.5M for the year, as compared with $4.69M budgeted. If we use a mid-point of $3.2M, this suggests a revenue shortfall for the year of $1.5M for this category.
2) Investment Income: For the first quarter of 2008, yields are at 4.12%, as compared to the 2007 YTD yield of 4.94%, and interest rates continue to trend downward. Assuming yields are off by 20% in 2008 as compared to 2007, then this would suggest a revenue shortfall somewhere in the neighborhood of $500,000 to $1M. We’ve split the difference and are projecting a shortfall of $750K.
For other revenue categories, we don’t have enough meaningful data at this point to suggest projections that differ from the budget.
[snip]
We’ll present a mid-year report to the Board of Estimates and the Council in late July or early August, at which time we will have more and better information and updated projections.
So, there you have it! I feel really uncomfortable waiting til July or August to do anything about this. It seems the responsible thing to do would be to get the complete information now and address this situation now if it needs to be done.
