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June 10, 2002
<br />
<br />MEMORANDUM
<br />
<br />TO: MICHAEL E. MALONE, CITY MANAGER
<br />FROM: GENE ANDERSON, FINANCE DIRECTOR
<br />SUBJECT: PRELIMINARY REVENUE ESTIMATES
<br />
<br />Per your request, I have completed my preliminary revenue estimates. The purpose of this memo is to inform
<br />you of several problem areas which will need to be considered as the City goes through the budget process.
<br />Any area not mentioned is projected to meet current budget expectations. Those areas of concern are as
<br />follows:
<br />GENERAL FUND
<br />
<br />1. Current property taxes are projected to be $5,901,110. That is $98,000 below budget projections,
<br /> however, delinquent collections and delinquent penalties are $33,000 above projections.
<br />2. The one and the ¼ cent sales taxes are projected to be $4,484,385. That is $515,615 below budget. The
<br /> economy has not enjoyed the typical post-contraction acceleration leaving us in our present situation.
<br /> Current economic forecasts call for a gradual and modest economic rebound.
<br />3. TXU Gas franchise tax is projected to be $240,000. That is $96,000 below budget.
<br />4. TXU Electric fran~hise tax payment was received today in the amount of $1,662,855. That is $66,467
<br /> over the budgeted amount. General confusion throughout the industry caused by deregulation
<br /> continues to make this an area to watch.
<br />5. Interest revenue is projected to be $160,000. That is $90,000 below budget. Low inflation levels
<br /> continue to hold interest rates down.
<br />6. SW Bell franchise tax is projected to be $129,830. That is $62,170 below budget.
<br />
<br />WATER & SEWER FUND
<br />
<br /> 1. Sewer charges are projected to be $3,880,325. That is $179,675 below budget. This assumes a mild
<br /> summer similar to last year.
<br /> 2. Industrial surcharges are projected to be $175,000. That is $50,000 below budget.
<br /> 3. Water sales are projected to be $5,907,946. That is $360,304 below budget. This also assumes a mild
<br /> SUlIllller.
<br />As was discussed with the Council during last year's budget workshops, new water and sewer rates with
<br />annual updates are needed.
<br />
<br />SPECIAL NOTE
<br />
<br />The Lamar County Appraisal District has the City's preliminary taxable value set at $1,072,200,974. That is
<br />$53,040,263 above last year's value. At a 61 cent tax rate, this equals an increase of $323,545 at 100%
<br />collection rate and $310,603 at 96°,4 collection rate. The Chief Appraiser states that there are about 75
<br />residential appeals pending with the Appraisal Review Board. Also, Silgan Can, Texas NE Railroad, Lamar
<br />Power Parmers, Killingsworth Enterprises, Cinemark, K-Mart, Whatco, Brookshires, Cavenders, Pads
<br />Oncology, Guaranty Bank, and Foxworth-Galbraith all have appeals pending. Campbell Soup has not
<br />appealed at this point, but is expected to do so. The ARB hearings continue through July 8th.
<br />
<br />
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