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Revenue Shortfall Likely for City

The City’s of Rye first-half financial results for 2011 were released last month and while revenues were 2% higher for the same period in 2010, expenditures were up 9%. For the six months ending June 30, General Fund revenues were $23.9 million, against expenditures of $14.7 million. The $9.2 million difference was $736,000 less than in the first half of 2010.

 

By Arthur Stampleman

 

The City’s of Rye first-half financial results for 2011 were released last month and while revenues were 2% higher for the same period in 2010, expenditures were up 9%. For the six months ending June 30, General Fund revenues were $23.9 million, against expenditures of $14.7 million. The $9.2 million difference was $736,000 less than in the first half of 2010.

 

General Fund revenues for the period reviewed were $449,000, or 2% higher than in the comparable 2010 period. This percentage is close to the 3% increase in revenues budgeted for the year. The three largest revenue increases were permits, etc. (up $308,000), charges for services (up $183,000), and interest (up $129,000). All three were well over half their budgets for the year. Non-property taxes were flat compared to 2010 and Intergovernmental and Inter-fund revenues declined.

 

General Fund expenditures were $1.2 million, or 9% higher than the equivalent period last year. The increase is far above the $60,000 increase budgeted for the full year, primarily because of the big increase in tax certiorari payments and adjustments, including the $1.3 million Osborn settlement. Otherwise, most expenditure categories were close to last year’s first-half levels.

 

Surpluses in the first-half are not always indicative of what can be expected for full-year results. Property taxes, the City’s biggest revenue source, are collected in February. The City invariably has deficits in the final six months of the year, ranging in the past few from $8 to $10 million.

 

Asked to comment on the interim figures, City Comptroller Jean Gribbins said, “The City continually reviews expenditures as well as monitors revenues. There is concern that mortgage tax revenue will not meet the $1,125,000 budgeted.” Mortgage tax is collected in June and December. She continued, “First-half mortgage tax is $100,000 below budget. The City may not know the second-half amount until after the 2012 budget has been adopted. At the current rate, the City could be facing a $200,000 revenue shortfall.”

 

Key balance sheet figures for the City’s General Fund show some declines from June 30, 2010. The Fund Balance at $19.7 million was down $73,000 while the unreserved, Undesignated Fund Balance at $11.7 million was $617,000 lower then a year ago.

 

Salaries, wages, employee benefits, and related taxes represent 55% of the General Fund’s expenditures. Salaries were down 2%, while benefits were up 1% from a year ago.

 

The Boat Basin Fund reported small revenue and surplus increases. Rye Golf Club first-half revenues decreased 1% to $4.8 million. A small increase, attributed to “charges for services”, was more than offset by lower concession income. Total Golf Club expenses decreased $106,000 (3%), producing a surplus of $1.5 million, up 5% or $72,000. Deficits for the full year are budgeted for both Enterprise Funds.

 

The bulk of the Building and Vehicle Maintenance Fund’s revenues are derived from transfers from other City funds. Its first-half surplus decreased to $397,000 from last year’s $492,000. Cash and investments decreased to $2.7 million from 4.4 million.

 

The City’s June 30 financial report is available on ryeny.gov.


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