FARMINGTON -- The city of Farmington exceeded its projected income for the year 2019 by almost $942,000, according to an amended budget approved by the City Council at its Jan. 13 meeting.
State law requires cities to submit amended budgets in January that show actual expenses and revenues for the previous fiscal year. The City Council approved a resolution adopting the amended budget.
For the general fund, Farmington projected to receive $3.5 million in revenue for 2019. Actual revenue received was $4,428,792. The city spent just over $4 million and ended the year with a surplus carryover of about $357,000.
Farmington's excess revenue in 2019 came from local and state sales tax collections, county turnback funds, interest and miscellaneous income and building inspections.
In his State of the City address, Mayor Ernie Penn reported the city is financially sound with "excellent cash reserves."
Penn said the city will continue to budget conservatively regarding income growth while maintaining a "tight control regarding operating expenses for each department."
Farmington conservatively projected to receive $1,150,000 from its city sales tax in 2019 but actual revenues exceeded that projection by almost 35%, or $1,549,059.
Farmington collects a 2% local sales tax, with 1% of the money going to the general fund. For the other 1%, up to half of that revenue is dedicated to paying off debt on two bond issues, and the rest goes to the general fund.
Revenue from the city's 1% sales tax has continued to increase around 10-11 percent each year at least since 2015, according to city financial records. The city received $653,189 in 2015 from its 1% sales tax. This increased to $688,459 in 2016, $770,376 in 2017, to $864,449 in 2018, and then to $953,073 in 2019.
For the second penny, the city distributed $533,485 in 2018 to the general fund and $598,946 in 2019 to the general fund, after making bond payments.
Penn said he believes sales tax revenues are up because of people moving to Farmington and also are a result of residential growth west of Farmington.
"People coming through our town to go home are shopping in Farmington. I've no doubt about it," Penn said.
He said he believes the convenience of getting into and out of stores in Farmington is another reason people are shopping here and taxes are up.
"It's kinda amazing," Penn said. "This pattern has been going on several years and it surprises me every year."
For other revenue sources, Farmington budgeted $1.1 million from the state sales tax and received almost $1.3 million. The city received about $40,000 more than expected from court fines, $100,000 more from county turnback funds, $71,000 more from interest income, $40,000 from miscellaneous revenue and $39,000 more from building inspections.
For expenses in the amended budget, the city budgeted about $4.2 million for the general fund and spent just over $4 million, a difference of about $114,000.
According to the amended budget, administration, fire, police and parks and recreation exceeded their projected expenses in 2019.
Some of these expenses included $75,000 for a fire substation located at the new public works building, $224,000 to finish improvements at Creekside Park and an additional $67,000 in engineering fees.
For the street department, actual expenses exceeded the budget by $754,037. The department projected to spend about $729,000 in 2019 but actual expenses were almost $1.5 million. Additional expenses included $915,000 for professional services, which are expenses that will be reimbursed by the Arkansas Department of Transportation for costs associated with widening Highway 170.
Revenue was up by $317,000 for the street department from a projected $728,600 to actual revenue of about $1 million. The revenue was up because of the reimbursements coming from the Department of Transportation.
The amended library budget shows that it projected $423,047 in revenue and received $425,530. For expenses, the library budgeted $423,047 and spent $241,461 (some of the expenses are carrying over to 2020 for a library expansion).
General News on 01/22/2020