CAREFREE TRUTH
Carefree Truth #315
Carefree Truth
Issue #315, April 7, 2014
Gary Neiss began the presentation by explaining that municipal revenue streams are like the 3 legged stool in the first slide of the video. The 1st leg is state shared revenues, the 2nd is property taxes, and the 3rd is local revenue sources. The top of the stool supports the core services. Core services include police and fire protection, as well as those services performed by the small staff. Staff duties encompass managing, planning, engineering, building, public works, accounting, record keeping, and the court.
State shared revenues come from state income tax that is based on each municipality's population, state sales tax, highway user revenue fund (HURF), and vehicle license tax (VLT). Local revenue sources include sales tax, business/vendor/user fees, utility franchise fees, court service fees, building permit fees, and development fees. Changes in state laws have caused Carefree to sunset development fees. The only property tax assessed to Carefree residents comes from agencies outside of Carefree, such as the school district and Maricopa County. Because Carefree assesses no local property tax, one leg of the stool is eliminated.
State Revenue Sharing: HURF, which is restricted to maintaining local streets, is expected to increase. Funding may be restored to the 2008 level. VLT is expected to remain consistent, but there should be a slight increase in both state sales and income tax reimbursement.
Local Revenue Sources: Revenue streams from the Water Company WIFA loan repayment, utility fees, and user revenues are consistent. Court fees are increasing due to the recent consolidation. The number of building permit fees have increased with additional remodels and new home construction. Sales tax is projected to be consistent with the 2012/13 fiscal year. 1% of the 3% local sales tax is dedicated to fire protection, however groceries are exempt from that 1%, so groceries bought at Basha's are taxed at 2%. Local revenue is finally stabilizing.
The top tier revenue contributors are construction, utilities, and retail. The second tier contributors are leases, accommodations, and restaurants. In the near term, 17 new homes are under construction, with an additional 60 planned. Several new retail businesses and a new restaurant, Carefree Bistro, have opened. A new bakery will be opening soon. A distillery, tasting room, and cafe are in the planning stages. The new management at the Carefree Resort is aggressively pursuing ways to fill their rooms during the summer months, with attractive offers for "Staycations". They will be coordinating marketing efforts with the Town. Construction will be tapering off eventually, so diversification of retail, restaurants, and accommodations to sustain the core services is a priority in the long term.
56% of the revenue is currently derived from sales tax, with 20% coming from state shared revenue. The remaining revenue is generated by user fees. The revenue is projected at 5.2 million dollars, an approximate increase of $300,000.
Councilman Mike Farrar asked if the Long Range Financial Plan is organic, based on ebbs and flows. Mr. Neiss confirmed that it is, and that it always needs tweaking. The Plan focused on trends, not on local details of revenue streams. Councilwoman Melissa Price complimented Gary on a job well done.
Lyn Hitchon
Prepared by Carefree Truth
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