Increased revenues, lower costs give city $8.6 million surplus

City finance officials are reporting that Austin ended FY2012 with an $8.6 million surplus. The figure comes thanks to a combination of lower than expected expenditures and higher sales tax collections than had been forecast. Fees associated with development were also stronger than expected.

 

The city’s two major utilities also contributed to the rosy economic picture. Austin Energy saw a $3.6 million improvement over budgeted FY2012, while the Austin Water Utility brought in $300,000 more than expected.

 

More encouraging news came in the form of future sales tax estimates. There, the city’s finance office is predicting a $2.2 million bump over initial FY2013 projections. Unlike budget surplus funds, future sales tax increases can be used to pay for a recurring expense. This could take the form of new employees for one of the many city departments in need of more hands.

 

City officials were set to unveil all of this good news at Wednesday’s meeting of the Austin City Council’s Audit and Finance Committee. However, toward the end of the meeting, Mayor Pro Tem Sheryl Cole, who chairs the committee, said that the budget presentation would be heard at Council mid-year budget retreat. That event is set for next Tuesday afternoon.

 

Before Cole’s announcement, Council Member Bill Spelman offered city residents a preview. As part of a post-mortem discussion about the city’s inaugural Formula 1 race, Spelman hinted at what will be a very welcome set of news from Deputy Chief Financial Officer Ed Van Eenoo.

 

“As Mr. Van Eenoo is going to tell us a bit later, all of our sales taxes were up, all of our mixed beverage taxes were up (in) FY2012 over FY2011,” he said. “Some of this is probably due to Formula 1, some of this is due to the continued success of South by Southwest and (Austin City Limits), and some of it’s just due to the fact that some of us have more money in our pockets, or feel a little bit more flush than we were.”

 

In Fact Daily obtained a copy of Van Eenoo’s presentation. The document is dotted with caveats about the preliminary, un-audited nature of FY2012 figures. Still, city finance was ready to paint a bright picture.

 

According to the presentation, permit applications for residential construction soared in FY2012 when compared to FY2011. Indeed, the presentation notes that the 116.4 percent growth in residential building permits is “unmatched in over two decades.”

 

That contributed to $4.2 million in development revenues above FY2012 estimates. Emergency Medical Service billings were also $2.4 million above budget. Traffic citations came in $1.5 million below FY2012 projections.

 

On the other side of the ledger, the city’s Police ($1.5 million) and Parks ($400,000) departments were each under budget in terms of expenditures. The Austin Fire Department came in $600,000 over FY2012 expenditure estimates. The city also saw an increase over projections in accrued payroll, retirement contributions, and charges for its wireless communications.  

 

Although the extra funds will be deposited into a reserve account, department heads throughout the city will no doubt line up to get a portion of the $8 million that could be allocated to new expenditures. What portion of this Council decides to spend, and how, remains to be seen.