Fort Smith sales tax and ad valorem numbers up in 2016, franchise fees down

Fort Smith closed 2016 in a final unaudited report submitted Saturday (March 18) that showed slight gains in the city’s sales tax collections for December and the year as a whole.

In a memo to Mayor Sandy Sanders, the Board of Directors, City Administrator Carl Geffken and department heads, Fort Smith Finance Director Jennifer Walker revealed city sales tax revenue for December 2016 was up 0.9% compared to the same period of 2015 with a final tally of $3.47 million, 0.6% above the month’s revised budget. City sales tax revenue to date is $42.313 million, 3.8% above last year and 1.3% above revised budget. The total revenue (street, bond, park/fire) for the year finished at $542,217 more than the revised budget estimate of $41.771 million.

The city runs a 2% sales tax program consisting of a 1% allocation to streets with an additional 0.75% for 2012 Revenue Bonds and 0.25% split evenly between the fire and parks departments. From this 2% fund, 2016 saw allocations of $21.156 million to streets while $15.867 million went to bonds and $5.289 million fire/parks.

When Walker spoke of the “revised” budget in her memo, she was referring to adjustments made by the Fort Smith Board of Directors at the Aug. 16 meeting during which the Board approved a downward budget revision of $1.41 million. From that figure, 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 fell by $132,150 apiece.

On the county sales tax side, the city’s share for December 2016 was $1.366 million, 2.1% more than last December and 0.5% above revised budget. To date, the city’s share in 2016 finished at $16.58 million — 3% above last year, 1.3% above budget, and $219,569 more than the revised budget estimate. Combining the two tax rates, the city booked $58.893 million in receivables for 2016.

FRANCHISE FEES, AD VALOREM
Walker noted franchise fees, which trailed for most of the year, finished the year 11% below expectations at $5.877 million against an anticipated $6.595 million — a drop-off of $717,916 compared to expectations.

“This shortfall is due primarily to decreases in oil and gas industry revenues and is offset by County Sales Tax overages and lower than budget spending in the General Fund,” Walker said.

Ad Valorem revenue ended the year at $12.209 million, 2% and $246,804 above 2016 budget estimates. From that figure, the General Fund portion totaled $7.219 million, also 2% ($139,152) above budget estimates.

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)
2016: $42.313 million
2015: $40.76 million
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
2016: $16.58 million
2015: $16.09 million
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