Fort Smith city sales tax receipts ‘holding steady,’ franchise fees down

Fort Smith city sales tax collections are holding steady approximately three months after the Board of Directors approved a budget revision to account for lower-than-anticipated revenues.

The total adjusted budget reduction resulting from the Aug. 16 Board of Directors meeting was $1.41 million. Street sales tax took the biggest hit with a $650,200 reduction while bond Issues were next at $495,900. Fire and Parks revenue estimates also fell by $132,150 apiece.

City Finance Director Jennifer Walker said one-cent street tax revenue for September totaled $1.72 million, up 0.96% compared to September 2015 and 0.59% above the revised budget for the month. For the first nine reporting months of the year, the tax generated $15.967 million, up 1.6% compared to the same period in 2015 and 1.5% above the revised budget.

“The total revenue to date is $236,925 more than the revised budget estimate,” Walker said in a memo to Mayor Sandy Sanders, City Administrator Carl Geffken, department heads, and the Board of Directors adding, “City sales tax 2016 is now trending at budget and forecasts year-to-date, indicating that the revised estimates are holding steady.”

The September report reflects tax collections on July sales.

COUNTY SALES TAX REVENUES
The city’s share of the county sales tax for September 2016 was $1.374 million — 3.5% more than last September and 1.79% above the revised budget amount of $1.35 million. Through the first nine reporting months of 2016, the city’s share totaled $12.511 million, which is approximately 3.3% above 2015 and 1.55% above the revised budget.

“The total revenue to date is $190,592 more than the revised budget estimate. County sales tax 2016 is now trending at budget and forecasts year-to-date, indicating that additional cuts are not necessary at this time,” Walker explained.

The county revenue is critical because it finds police, fire, city administration and other critical services.

Franchise fees and ad valorem (property tax) receipts continue to run below expectations, Walker stated in the memo. A large part of the deficiency fell on the franchise fees end with financials showing actual revenue from OG&E in the amount of $1.611 million against an estimated revenue of $3.6 million. AOG showed a $537,698 actual against an estimate of $1.202 million. Walker promised a “more in-depth review of these two revenues” at the budget hearings beginning Nov. 29.

Also, despite the delay in releasing September’s report, Walker said the city hopes to receive October sales tax “early next week” and said the city “should have a good estimate of 2016 revenues prior to the upcoming budget hearings.”

PREVIOUS ANNUAL SALES TAX COLLECTION INFO
• Fort Smith 2% sales tax collection (1% for streets; 0.75% for 2012 water/sewer bonds; 0.25% for fire and parks)
2015: $40.76 million (With 75% of the year reporting, the 2016 YTD is at 78.35% of the 2015 total.)
2014: $40.198 million
2013: $38.938 million
2012: $39.21 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.84 million

• Fort Smith portion of 1% countywide sales tax
2015: $16.09 million (With 75% of the year reporting, the 2016 YTD is at 77.76% of the 2015 total.)
2014: $15.625 million
2013: $15.353 million
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million