Sales tax collections up third straight month

A modest gain in the city's July sales tax collections pushed the city budget a little closer to a positive year-to-date figure.

A report released by the Hot Springs Finance Department shows the General Fund sales tax collection for July was $1,060,292, which is 0.99 percent more than the $1,049,857 collected in July 2013. The Police and Fire Fund collection was $530,146, compared to $524,928 a year ago.

July was the third month in a row with a gain in sales tax collections.

However, the year-to-date budget comparison shows that the city is still 0.30 percent below the same period a year ago. A total of $6,961,544 has been collected through July 2014, compared to $7,058,992 for the same period for the General Fund in 2013, and $3,480,772 has been collected through July 2014 for the Police and Fire Fund compared to $3,529,496 for the same period last year.

City Manager David Watkins said Monday he had hoped collections would be up to at least 1.75 percent above last year by this time, but thinks the adverse weather the first few months of the year was responsible for the slow collections.

"I think the weather was a killer, but we're now enjoying some of the growth that was deferred or lost because of the rainy spring," he said.

"The Advertising and Promotion (Commission) receipts were up and I think people are back to spending money, which is good. We're so dependent on that (sales tax) that it affects our budget planning, which we're in the middle of right now. Would we like to see more growth than this? Of course, but at least we're not going backward like we were," he said.

Due to the lower-than-expected sales tax collections, Watkins said there had been some mid-year adjustments to the budget, but cash balances are up.

"If you look at our cash balances from a year ago, we've had some months come in stronger, some come in weaker, but we've been able to control expenses and that's why, if you look at the financial reports, it shows where we're at for the year in the General Fund, which is pretty healthy. The water utilities are taking a hit because of poor sales," he said.

While capital improvement projects are usually the first to be cut in lean financial times, Watkins said none have been made so far this year.

"We'll probably have the most capital under construction here than we've had in along time. We're waiting on HUD to give us the money they committed to in order to get the sidewalk improvements going, which are sizable. But we're doing what we said we'd do," he said.

Watkins said if "things come up short," there is enough room in the budget where cuts can be made in expenses.

"The lion's share of the budget is personnel and if we have unfilled positions, which we do, that is money we're not spending," he said.

Watkins said it is too early to discuss possibilities for the next year, but thinks the priorities of the governing body are the downtown area, a water supply, the Consent Administrative Order issued by the Arkansas Department of Environmental Quality, radio communication equipment, maintenance, and "a real capital improvement plan."

"If we're going to be competitive, we're going to have to have dedicated funding for capital. We're not in a position yet to recommend that, but that's what we need," he said.

Steve Arrison, CEO of Visit Hot Springs, said collection of the 3-cent advertising and promotion tax was "a little lower than anticipated," but a lot of receipts were received after the deadline, due to the Labor Day holiday which delayed some payments.

"We're already up more than 3 percent for September and there are still several days left to collect. We're more concerned with the year-to-date number than the daily numbers, anyway," he said Monday.

Arrison said the 2014 year-to-date collections "are OK," and believes they will finish the year with strong numbers.

"We're up 1.35 percent, and I think we budgeted to be up 1.2 percent. We always like to be up over 2 percent for sure, but I think we'll get there. There was a slow start to the year and we're a little behind due to the weather, but we're catching up quickly," he said.

Local on 09/30/2014

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