HomeMy WebLinkAbout170502 Revenue projections
__________________________________________________________________________
Memorandum
TO: Vail Town Council
FROM: Finance Department
DATE: May 2, 2017
SUBJECT: Revenue Projection Update
I. SUMMARY
The purpose of this memo is to address potential concerns Council may have with first quarter Sales
Tax collections being reported at a 7.9% decrease from the prior year.
In addition, staff is anticipating a lackluster April performance based on information gathered from
local businesses and lodging reports. Sales Tax collections continue to be impacted by business
closures however we are hopeful that with the re-opening of the Vail Cascade (scheduled for xx) we
will see improvement over the summer months. The winter months may see the opening of the
DoubleTree in West Vail. Other impacts include less snowfall this spring combined with a late Easter,
as well as fewer international visitors.
To give Council additional perspective of the town’s budget position should we end the year “down”
from the prior year, we’ve gathered the below information based on an assumption that collections
end the year 5% down from 2016:
2017 Budgeted surplus in the General Fund: $ 934,463
Impact to the General Fund if Sales Tax Collections come in 5% down: (1,500,000)
Estimated shortfall for 2017** (Reserves would be used to cover): 565,537
**This assumes that there are no expenditure savings during the year. The average expenditure
savings in the General Fund based on the past five years is $1.5M per year. If the town had
expenditure savings, then reserves would not be needed to cover a shortfall.
Over the last 15 years of sales tax collection history, the town has not experienced a decrease except
for 2009, when the impact of the recession hit with a 13.8% drop.
General Fund reserves are currently at $27.3 million, or 71% of the town’s annual General Fund
revenues. The minimum reserve balance is 25% of annual revenues.
Staff will continue to monitor revenue performance as we head into the 2018 budget process and do
not recommend any adjustments to budgeted revenues until the next supplemental budget
appropriation currently scheduled for June 20th.