City reports first quarter revenue, less than projected

The city of Yuma had anticipated that revenue for the coming year would be down, but even so, the figures for the first quarter of the new fiscal year were disappointing.

Revenue for the general fund received by the city for July, August and September totaled $11 million, Bob Stull, deputy city administrator, reported to the Yuma City Council during Tuesday's roundtable. That is $875,000 less than budgeted.

"It's been a difficult first three months."

Even so, he said, the city is faring better than many parts of the state.

The main "culprit," he said, is city sale tax revenue. Summer sales tax revenue tends to be lower than for the rest of the year, he said. But as an indication of the continuing impact of the economy on retail activity, the sales tax revenue is almost $800,000 less than anticipated.

The $3.8 million collected for the quarter was about 18 percent less than budgeted, he said.

That number doesn't reflect the "cash for clunkers" program during which the federal government offered $4,500 rebates to consumers who turned in clunkers for new, more fuel-efficient vehicles, Stull said. That's because there is a lag of two to three months between the time the state collects sales tax from businesses and when the city receives the money, he explained.

"We'll probably see the clunker sales next month," he said.

It remains to be seen whether the sales tax revenue generated by the clunkers program is a one-time blip or part of an upward trend in car sales, he said.

City sales tax revenue wasn't the only source of revenue for the city that was less than projected for the quarter, Stull said.

At $1.6 million, the city's share of the state sales tax revenue was 3 percent less than expected.

And the city's portion of state revenue sharing from state income taxes also continues its downward trend, Stull reported.

Last year, the city received $3.3 million in state shared revenue for the first quarter. This year, the city's share was $2.8 million for the quarter, Stull said.

"Next year, we already know it will be under $2 million," he said, explaining that the amount is known ahead of time because it's based on income taxes collected two years before.

The city had anticipated sharp reductions in revenue and so had made downward adjustments to expenditures, he said. That's an effort that's ongoing as the city officials keep a close eye on the economy and the revenue stream.

"We're very aware of where revenue is so we're making adjustments in expenditures," Stull said.

That led to a question from Councilman Paul Johnson, who noted that the city's expenditures from the general fund for the first quarter totaled $12.5 million, nearly $1.4 million less than the revenue brought in.

Stull explained that the main reason is that payroll expenditures remain steady over 12 months while revenue tends to be lower in the first quarter.

"We anticipated we would spend more than we took in for the first quarter," he said. "We should see revenue go up the second quarter."