Through the first six months of FY 17-18, the Jacksonville city budget is in good shape, showing a positive variance, per a recent report from the Jacksonville City Council auditor.
“The City is projected to experience an overall favorable budget variance of approximately $9.3 million within the General Fund/General Services District (GF/GSD). Revenues are projected to be $0.4 million more than budgeted and expenditures are projected to be $8.9 million less than budgeted,” reads the Jacksonville City Council auditor’s report.
“That’s less than one percent, but it’s good that it’s favorable, and things are looking good for the general fund,” said auditor Kyle Billy Tuesday in the Council Finance Committee.
Those savings realized in the current budget may have real world application, as the city is still waiting on payback from the federal government for hurricane related costs, and as the Mayor’s Office begins to work through departmental budgets ahead of its own proposed FY 18/19 budget next month.
Regarding Matthew, 2016’s tropical nuisance, “The latest Hurricane Matthew projection estimates the financial impact will be approximately $47.0 million. As of May 8, 2018, the City incurred expenditures of $28.8 million related to Hurricane Matthew.”
With the Feds poised to pay back 87.5 percent of that $47 million, an extra $7 million slid into a contigency account this budget year should make up for that.
“We’re actually going to be a little overfunded there, which is good,” Billy said, as Irma, 2017’s storm, is another matter.
“The latest Hurricane Irma projection estimates the financial impact will be approximately $83.1 million. This could result in an estimated $10.4 million negative impact to the GF/GSD in the future. As of May 8, 2018, the City incurred expenditures of $54.2 million related to Hurricane Irma.”
“Eventually, the city will have to [fund for] Irma,” Billy said.
Expect a contingency for Irma in the next budget. One wonders if the city will start planning for these storms as potential yearly impacts.
Speaking of impactful storms, city investments are starting to hit a lull.
“The Operating Portfolio experienced a net of fees return of negative .30% for the quarter ending March 31, 2018, which outperformed the Blended Benchmark by 27 bps. Performance of the portfolio over the last year was a positive 1.25%, after fee deductions. During the past three and five years the portfolio has earned an average annual return of 1.15% and 1.31%, respectively.”
Expect anemic performance to continue: “Achieving positive returns in equity and fixed income markets has become increasingly challenging due to elevated price levels and stubbornly tight spreads.”
An issue in Finance Committee: a roughly $3 million decline in municipal sales tax revenue (from the state pool) compared to budgeted amounts, with expectations of $170 million in proceeds compared to $173 million.
Despite this underperformance, the number is still expected to be up over the previous fiscal year’s $165 million.
County sales tax revenues are expected to be favorable, with the half-cent sales tax $1.8 million over projections.