After quietly dealing with recession, F’ville foresees uptick
City employment falls from 163 in 2008 down to current 115; staff predicts modest recovery in tax revenues through 2018
The light at the end of the fiscal tunnel may be peeking through for Fayetteville. A Feb. 22 report at the Fayetteville City Council retreat showed city revenues inching up over the next few years after taking a beating during the first few years of the Great Recession.
Finance Director Lynn Robinson said finance staff members expect to see a slight recovery in most revenue categories.
A sampling of those categories include property tax revenues stabilizing with no loss in Fiscal Year 2014 followed by incremental increases in FY 2015 and FY 2016.
The projection is for property tax revenues to increase by a full percentage point in FY 2017 and FY 2018.
That is good news given that the city’s tax digest decreased 8.99 percent in FY 2011, 5.86 percent in FY 2012 and 11.36 percent in the current FY 2013.
That translates into the city losing more than 26 percent of the value of all property in a three-year period.
The most significant gain in revenues over the next five years is expected to come in local option sales taxes (LOST), the other large revenue source.
While LOST revenues are essentially flat this year, projections show a 12.2 percent increase in FY 2014 followed by a 7.16 percent increase in 2015 and increases of 4.79-6.53 percent in the three succeeding years.
A portion of the reason for the projected increases deals with the recent agreement between Fayette County and the municipalities that set the LOST distribution for the next decade.
Fayetteville will see its 12.25 percent share of LOST receipts increase to 12.85 percent in 2014 and to 13.5 percent in 2015. The rate will range from 14.2-14.9 percent during the remaining seven years of the 10-year term.
In all, the general fund over the next five years is expected to see slow gains in revenue.
While the current FY 2013 amended budget sits at $9.38 million, revenues in FY 2014 are expected to increase to approximately $9.6 million and continue a slow increase to $10.65 million in FY 2018.
Though predicting a city’s financial status over a period of years is not always easy, the city’s finance staff has a track record of having predicted the recession before it hit.
The City Council responded to those predictions and, in mid-2007, began making cuts in expenses. Perhaps the most visible example of those cuts came in the downsizing of the number of city employees.
The city employed 163 full-time equivalents in 2008, but today that number has decreased to 115.