Dover City Council learned Monday night that revenues for the 2012 fiscal year will be about $270,000 less than anticipated, according to updated projections presented by Controller Donna Mitchell.
Dover City Council learned Monday night that revenues for the 2012 fiscal year will be about $270,000 less than anticipated, according to updated projections presented by City Controller Donna Mitchell.
Revenue estimates were reduced for certain areas of the budget that total about $618,000 Mitchell said at City Council’s meeting in City Hall.
However, the city’s real estate transfer taxes at $963,152 year to date and cable franchise fees at $135,452 are on track to be higher, thereby easing the overall shortfall, Mitchell said.
The city budgeted a total of $900,000 in real estate transfer taxes for 2012, but the city is on track to pull in nearly $1.23 million based on updated projections calculated as a result of the revenue that came by Dec. 31, 2011, according to Mitchell’s quarterly report to City Council.
Transfer taxes are paid when the sale of real estate occurs. The tax rate is 3 percent on the sale price, with 1.5 percent going to the state and 1.5 percent going to incorporated municipalities or the county if the property is outside of the town limits, Mitchell said.
Franchise fees are charges to cable providers such as Comcast and Verizon for use of the city’s right-of-way for their cables and equipment, she said.
“Both of these fees are passed onto the consumer through the settlement cost in the purchase/sale of property and the cable bill they receive from Comcast/Verizon,” she said. “Once collected by the state or cable provider, they send to the city the amounts that pertain to properties in city limits.”
The city had budgeted $520,000 in franchise fees, but it’s on track to collect $540,000.
However, five large real estate transfers worth about $696,000 were larger than what the city usually receives, Mitchell said. Average transfers, minus those large transactions, amounted to $266,000, which was well under the halfway mark for the year -- about $450,000, she said.
Councilman David Anderson asked how much the city would fall short at the end of the 2012 fiscal year.
Mitchell said revenues overall would be down about $270,000.
The revenue shortfalls include the city collecting $84,000 less than expected for trash fees, $100,000 for something called the “intrafund service receipts electric” and $58,393 for something called the “intrafund service receipts for water/waste water.” The latter two relate to the fact that several departments in the city’s General Fund are billed to the utilities for their share of the administrative services provided by these departments, Mitchell said. Due to vacant positions, these departments are under budget.
They include the City Manager’s Office, Human Resources, City Clerk, City Council, Finance, Information Technology and Central Services, she said.
A few on council wondered what the city could do to raise revenue forecasts.
Anderson asked how many tax delinquencies the city had.
City Manager Scott Koenig said the city was owed about $900,000 in delinquent taxes. About $700,000 of that total had been delinquent for one year, he said. The city is in the process of getting property owners to pay their taxes.
Councilman Sean Lynn asked Koenig to see if the city can look at going after these delinquent taxes more aggressively.
“That’s a huge amount of money to have on the street,” he said.
But the news was not all bad Monday night.
As for the wastewater funds, the city revenue forecast increased by about $240,000 to $14.1 million because of increased usage, Mitchell said.
Electric was the same in that higher than expected usage increased revenue forecasts by about $707,000 to $95 million, she said.
Dover City Council unanimously voted to accept Mitchell’s quarterly report.