Council Auditor Kirk Sherman has released his first quarterly summary for the first quarter of the fiscal year. While Sherman said it’s too early to notice any trends — good or bad — for the year, he did say it’s pretty easy to see the City’s Building Inspection division is going to have to make some major changes before the next budget cycle.
“The Building Inspection’s sub-fund account had been going down for a while,” said Sherman, adding the division has been living off a healthy surplus for a few years thanks to the housing boom. However, that surplus has been eaten away. “The fund balance they built up is just about gone. It’s time to do something. They are either going to have to raise their rates or lay off some people.”
According to the report, the division is projected to finish the budget year about $3.2 million in the negative. A fund surplus has made this negligible the past couple of years. However, that surplus is almost gone.
“They are authorized to spend $3.5 million more than their budget. This is the last year they will be able to get away with that,” said Sherman.
Raising the cost of an inspection would seem like the most likely solution. Sherman said the rates are determined by several factors including the size of the home and the type of inspection being done. With fewer houses being built than 3-4 years ago, the number of inspections being conducted is down.
“There is not enough money coming in now,” said Sherman. “In the new budget year, something will have to change.”
The rest of the City seems to being doing OK, said Sherman.
“It’s a little indifferent and it’s really too early to tell,” he said. “Looking at the general fund, unless something is way off, nothing tends to pop up. There is nothing out of the ordinary. There are no trends good or bad and it appears everybody will probably live within their budget with no particular problems.”
According to Director of Administration and Finance Mickey Miller, the City’s general fund revenues and expenditures are both projected to be approximately $949.6 million. The revenues, Miller said in a letter to Sherman, reflect a $10.8 million unfavorable variance due to lower than anticipated revenues from the State.
“Chief amongst these are a $5.7 million unfavorable in the half-cent sales tax, $2.3 million unfavorable in the County sales tax and $1.3 million in the Municipal sales tax; along with other lesser unfavorables,” said Miller.
The report indicates the Clerk of the Court has an unfavorable variance of approximately $600,000 due to lower than anticipated recording fees and documentary stamps that are a direct reflection of the struggling local housing market.
Also, SMG — the company that manages City-owned venues such as Jacksonville Municipal Stadium, the Baseball Grounds of Jacksonville, the Times-Union Center, the Osborn Center and Veterans Memorial Arena — has implemented measures that will trim approximately $2 million from its 2007-08 budget.
“This will offset the $1.1 million in unfavorable revenues from lower than anticipated ticket surcharge fees as well as improve the fund’s equity,” said Miller.
In other budget news:
• JEA is reporting a “record high” contribution to the City’s general fund of $23.5 million.
• JTA Controller Thomas Cerino indicated JTA’s general fund expenditures were below budget, overall.
• Jacksonville Port Authority Deputy Executive Director and CFO Ron Baker reported the port is “in good financial position and experienced no budgetary stress during the period.”
• Jacksonville Aviation Authority Controller Diane Pinkerman indicated “operating revenues were slightly above budget and expenditures were lower than budget, resulting in a favorable operating income variance.”