Town Finance Director David Pock told the Town Council last week that Fiscal Year 2022 wrapped up in a positive fashion and things are looking good for the first quarter of Fiscal Year 2023.

Pock reported that General Fund revenues for the past fiscal year, which ended June 30, exceeded budgeted expectations by $1.8 million. Also, General Fund expenditures were below budget by $5.7 million. That includes $4.2 million in savings from using American Rescue Plan Act (ARPA) funds for public safety contracts.

“After reserve requirements are met and budgeted FY23 transfers are made, a total of $3.7 million will be transferred to the Capital Project Fund,” Pock said.

Additionally, $4.2 million of FY23 General Fund revenues will be transferred to the Streets Fund, as previously directed by the council.

Audited year-end fund balances will be available and presented to the council Nov. 15, with the Annual Comprehensive Financial Report.

Pock also called first quarter revenues for FY23 “encouraging.” He said overall local Transaction Privilege Tax (TPT, or sales tax) have exceeded budgeted expectations in all categories. Also, the net taxable activity has increased by 10.2% over FY22. There are modest year-over-year increases seen in all categories.

State shared income tax revenue is up significantly due to the timing of the state income tax collections. However, those numbers will not meet the estimate provided by the League of Arizona Cities and Towns, according to Pock.

Other state shared revenues are mixed, with the most notable weakness in the Highway User Revenue Fund (HURF) receipts. This is funded primarily with gasoline tax.

“Higher fuel prices have reduced the overall demand, resulting in fewer gallons being sold,” Pock said. “[Gas tax] is calculated based on gallons, not price.”

State shared revenue numbers in all categories were below expectations with the exception of vehicle license tax, which was $5,000 more than estimated. HURF, income tax and sales tax were all down from estimates.

The local numbers for the first quarter FY23 are reported as follows:

Total net taxable activity was $138.7 million, an increase of $12.8 million over Q1 FY22.

Total revenue for TPT collections was $4.48 million, above the budgeted $3.65 million. A one-time audit collection of $450,000 and $380,000 in increased activity accounts for the $830,000 increase over first quarter a year ago.

Retail sales tax and use tax collections were $2.21 million or $130,000 over budgeted amount. It was an increase of $280,000 over last year. This includes local and online retail sales.

Construction sales tax was up $47,000 from a year ago. There was $489,000 collected compared to $480,000 budgeted.

The first quarter revenues from utilities and communications were above expectations. There was $484,000 collected compared to $313,000 budgeted. That is a $7,000 increase over a year ago.

Real estate taxes for long-term residential and commercial rentals are ahead of expectations. $258,000 was collected and there was $239,000 anticipated in the budget. That is a $39,000 increase over FY22.

Sales tax revenues from restaurants and bars was fairly consistent over last year. There was $268,000 collected compared to a budget estimate of $246,000. It was just $5,000 over revenue from one year ago.

Pock said this was good news because this is a category that usually takes the first hit from economic conditions.

Revenues from services are also sensitive to economic conditions and that came in on the plus side for the first quarter. There was $317,000 collected, or $27,000 above expectations and $21,000 more than collections the first quarter last year.