9.16.2020 4.3 Finalize Revenue Scenarios · Finalize Revenue Scenarios September 16, 2020 Finalize...
Transcript of 9.16.2020 4.3 Finalize Revenue Scenarios · Finalize Revenue Scenarios September 16, 2020 Finalize...
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Finalize Revenue ScenariosSeptember 16, 2020
Finalize Revenue Scenarios
• Recap of September 14 Council Meeting and Preliminary 2021 Tax Levy
• Pick three or four revenue scenarios based on forecasting and tax levy amount
• Revenue scenarios will guide amount of budget reductions necessary for the budget scenarios
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Property Tax68%
Lodging Tax11%
Permits5%
Transfers from other Funds
4%
Intergovernmental Revenue (Grants)
3%
Program Income3%
Business Licenses2%
Admissions Tax2%
Other2%
2020 General Fund Budgeted Revenues
General Fund Revenues
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Timing of Receiving Revenues
• Property taxes – receive twice a year and historically collect 99% of taxes levied ‐ however do not expect to this year
• Lodging & Admission taxes – receive monthly, performance based on hospitality economy, little City influence
• Permit Fees – receive throughout year, not allowed to set fees higher than costs for the service, fluctuates with economy and development market
• Licensing – liquor licensing revenues received annually in late May and early June, and other types of licenses come in throughout the year
• Program Income – receive throughout the year (primarily Public Health and Parks and Recreation)
• Grant Revenue – receive throughout the year
2020 Budget General Fund Revenues Pre Covid‐19
2020 Projected General Fund Revenues
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Lodging and Admission Taxes
Reduction of Lodging and Admission Tax Revenue due to COVID‐19
• In 2019, Local lodging and admission taxes represented $10.4 million of the $79.5 million General Fund revenues.
• 2020 projected lodging and admission taxes are projected to be down by $6 million.
• 2021 could still be down by as much as $5 million.
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Lodging and Admission Tax Forecasting
• To forecast potential LLA tax revenue, City staff considers a variety of sources that provide national forecast data. Staff also monitor economic data and news related to lodging, dining and entertainment.
• Then they consider city‐specific data from Smith Travel Research with information on daily room occupancy and revenue for all of Bloomington’s 47 hotels. This local data lets us make any necessary adjustments to the national data trends.
• Staff use this data to create forecasts for three possible scenarios, including a quick recovery (unlikely), moderate recovery, and a long recovery.
Lodging and Admission Tax Forecasting
• Another good forecasting measure is RevPar, or revenue per available room. This combines hotel occupancy rates and daily room rates to compute lodging revenue. So far, RevPar has been rising through the summer months. Right now, staff expects this to level out into the fall and winter months compared to the baseline of 2019 revenues.
• Each month staff get real‐time data as the City collects local lodging, liquor and admissions taxes, which gives us real collection amounts and can validate prior forecasts. .
• It’s important to remember that even though the projections to date have been relatively accurate, the future of the economy and pandemic is very uncertain. By taking a more conservative approach initially, the City will be able to be flexible and react quickly.
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Worst Case 2021 Budget :$ 4,567,422 Lodging Taxes (47% reduction)$ 583,393 Admission Taxes (66% reduction)$5,150,815 Total
Moderate Case 2021 Budget: $ 5,393,255 Lodging Taxes (37% reduction)$ 930,623 Admission Taxes (45% reduction)$6,323,878 Total
2019 Lodging and Admission Tax Revenue was $10,384,886
Lodging and Admission Taxes 2008‐2012
$‐
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
$3,500,000.00
$4,000,000.00
$4,500,000.00
$5,000,000.00
$5,500,000.00
$6,000,000.00
2008 2009 2010 2011 2012
Lodging and Admission Taxes 2008‐2012
Lodging Taxes Admission Taxes
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Non‐tax Revenues
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$‐
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
2016 Actual 2017 Actual 2018 Actual 2019 Actual 2020 Budget 2021 Budget 2022 Budget
Permit Revenues
License Revenue • 69% of licensing revenue comes from the hospitality industry (liquor, food & hotels) with the largest share of that coming from liquor licenses.
• Licensing revenue tends to be pretty stable. Surprisingly, the pandemic doesn’t seem to be having the impact you might anticipate.
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Program Income Categories 2020 Budget
$881,000 Public Health
$585,300 Recreation Programs
$257,500 Police
$154,000 City Clerk (Passports)
$119,700 Creekside
$ 59 900 Other
$2,057,400 Total 2020 Program Income Budget
Intergovernmental Revenue Categories 2020 Budget
$1,305,800 Public Health Grants
$1,100,000 Police State Aid for PERA
$ 154,800 Police Grants
$ 26,000 Other
$2,586,600 Total 2020 Intergovernmental Revenue Budget
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Property Taxes
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2021 Median Value Home $286,400City Tax at different Tax Levy Options
Impact to 2021 Median Value Home
5.00%• Median Value Home +$3.53/month or $42.36/year
6.44%• Median Value Home +$5.00/month or $60/year
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Examples of Impacts to 2021 Rental Properties
Market rate examples of rentals in Bloomington:
5.0%• New Construction Senior Co‐op +$7.50/month or $90/year • New Construction +$5.00/month or $60/year • Naturally Occurring Affordable Housing +$3.60/month or $43/year
6.44% • New Construction Senior Co‐op +$8.75/month or $105/year • New Construction +$6.35/month or $76/year • Naturally Occurring Affordable Housing +$4.30/month or $52/year
Reductions necessary to balance budget
0% Levy Increase
1% Levy Increase
2% Levy Increase
3% Levy Increase
4% Levy Increase
5% Levy Increase
6.44% Levy Increase
Worst Case $4.8 million
$4.2 million
$3.5 million
$2.9 million
$2.2 million
$1.6 million
$648 K
Moderate Case
$3.6 million
$3 million
$2.3 million
$1.7 million
$1.0 million
$391 K