The Town of Fountain Hills has completed the first quarter of its 2015/16 fiscal year (ending Sept. 30), and things appear to be trending in the right direction with modest increases in revenue categories over a year ago.

Finance Director Craig Rudolphy told the council at its Nov. 5 meeting that expenses are outpacing revenue by a small margin, however, he said that it is normal for the first quarter in late summer to be slow in income generation.

It is also the time of year when new projects get started and initial expenses are slightly higher.

Operating Fund revenues are 10.3 percent under budget, but 4.4 percent higher than last fiscal year. Operating Fund expenditures are 1 percent under budget, but also 3.4 percent higher than last fiscal year.

Rudolphy said typically the second half of the year in Fountain Hills is when the greatest revenue comes in with winter visitors in town during much of the third quarter (January through March).

Local sales tax and state shared revenues accounted for 93 percent of the town’s operating revenue during the first quarter. That was about $1.8 million or about 3 percent greater than the first quarter in 2014. The revenues for the operating fund were 89 percent of proposed budget for the July-September period.

The town continues a slow but steady progression up from the depths of the Great Recession.

The 3 percent increase in revenue is ahead of the average for the last five years and individual categories continue to improve.

The retail sector for local sales tax is up 3.1 percent from a year ago and is about 4 percent above the five-year average.

The restaurant and bar sector is a category that remained strong in Fountain Hills through the recession and it is up by nearly 8 percent from the first quarter a year ago.

The telecom sales tax is one that is fairly consistent over the years, and it shows a 3.1 percent increase over last year.

Construction sales tax collections were down from a year ago showing a revenue decrease of nearly 25 percent from late summer 2014.

Public safety services remain the greatest expense for the general operating fund -- using more than 50 percent of the revenue.

Administration uses 18 percent and Community Services (parks, community center, senior services) uses 14 percent as does Development Services. The remainder is the municipal court and mayor and council.

Pavement management, a primary council priority after public safety, is funded through the Highway User Revenue Fund from the state as well as a share of Vehicle License Tax revenue collected by the state.