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City Council <br />Meeting Minutes June 30, 2020 <br />• Net of rebates $600K <br />Ms. Neel stated in the initial plan in Phase 1 was to balance the budget to reduce <br />expenditures to $5.5M but the YTD expenditure actual reductions are $4.7M. <br />Hotel Occupancy Tax (HOT) Fund: <br />Total projected shortfall is $975K <br />HOT Tax collections <br />• Year to Date: 45% of budget <br />• Last Year YTD: 70% of budget <br />YTD expenditure reduction is $700K, Remaining covered by HOT fund balance <br />and the reserves. <br />Enterprise Funds: <br />Total projected shortfall is $400K <br />Revenue reduction due to no disconnect fees & late fees. Offset by expenditure <br />reductions <br />Ms. Neel stated the sales tax revenue forecast is as follows: <br />FY19: Up 3.9% which exceeded budget amount <br />FY20 revised is 10% Year -To -Date (YTD) collections are 78% of budget. <br />Internet sales YTD exceed annual budget 25%+. <br />For the remainder of the FY: <br />• Outlet Malls sales tax, we will assume only 60% of collections <br />• Base sales tax, we will assume only 80% of collections <br />FY21: a decrease of 6.5% with a continued anticipation of Covid impacts on <br />employment, tourism & disposable income <br />FY22-23: a decrease of 19% due to the Comptrollers ruling on internet sales <br />collected at point of destination will significantly reduce revenue. Anticipate <br />employment to increase as more cash flows into the economy increasing sales tax <br />revenue. <br />Ms. Neel stated in FY19, 46% of general fund revenue was made from the sales tax <br />and in FY22 the decline and loss of revenue will mean that sales tax will only <br />contribute 34% to the general fund. <br />The Expenditure Base Assumptions include: <br />Personnel: <br />• Civil service Meet & Confer are funded <br />• Non civil service 4% merit/COLA <br />• Texas Municipal Retirement System, worker's comp increased <br />City of San Marcos Page 2 <br />