The City's general fund is anticipated to have a $4 million surplus for fiscal 2012-13, according to a midyear budget review released Wednesday by the City Council Auditor's Office.
The previous summary released in mid-February and reflecting the first three months of the fiscal year forecasted a $15.2 million "favorable variance," or surplus for the general fund.
The difference between the two reports is the transfer of $11 million from the general fund to economic development accounts.
The funds come from debt savings from bond refinancing. Mayor Alvin Brown proposed the transfer in January and it was approved by City Council in March.
Of the $11 million, $9 million is earmarked for Downtown economic development and the remaining $2 million will be used for countywide deals.
City ordinance code requires the auditor to collect financial statements and narratives from reporting entities within City government every three months. They are not audited except for "tests of reasonableness on a sample basis," the report states.
The City fiscal year begins Oct. 1.
As the office stated in its first three-month report for fiscal 2012-13, revenue continues to be strained by shortfalls in taxes.
A revenue deficit of nearly $5 million is projected, mainly because of tax losses in franchise fees, utility service taxes and property taxes.
"The unfavorable variances in franchise fees and utility service taxes are directly related to a decrease in JEA's revenues for electricity and water," the report stated.
The Jacksonville Fire and Rescue Department is projected to have a $1.4 million deficit in expenditures and a deficit of about $1.8 million in overtime salaries.
"We are concerned the Fire and Rescue Department has spent approximately 72 percent of its approved budget for overtime as of the close of the second quarter," the report states.
The City and the Jacksonville Sheriff's Office continue to have differing opinions on the sheriff's budget. City Chief Financial Officer Ronnie Belton projects the sheriff's office will produce a surplus in expenditures of about $10 million. The sheriff's office predicts about an $8.7 million surplus in expenditures.
The sheriff's office recently hired 29 new officers and expects to fill most of its vacancies by the end of the year. If filled, the surplus could be reduced by about $1.4 million, the report stated.
Of the 30 sub-funds reviewed, 13 had a projected deficit for year-end and six had a negative cash balance.
"We are concerned regarding the cumulative negative effect of these sub-funds on the overall financial condition of the City," the report states.
The Office of General Counsel Sub-Fund is projecting a $1.4 million surplus for the fiscal year.
"The projected favorable variance of $546,267 in charges for services revenue indicates fees should be analyzed," said the report.
It explained the revenue consists of hourly fees for attorneys and paralegals billed to the government agencies for legal services provided.
"This is an internal service that should not be a profit-generating activity," the report stated.
The sub-fund revised budget for operating expenses included an increase of about $600,000 from the quarter that ended Dec. 31, 2012, because of increased funding for outside counsel and experts.
The Public Parking System Sub-Fund continues to be challenged and the report projects a $174,000 deficit.
"Parking late fees continue to underperform budget, with only 26 percent of the budgeted revenue received as of the close of the second quarter," the report stated.
With the St. Johns River Ferry Commission working to develop a sustainable plan for the link to Florida A1A, the Mayport Ferry Sub-Fund is projected to have a deficit of about $104,000 for the fiscal year because of lower than budgeted ridership fares.
As it did in the first report, the auditor urged the hiring of a comptroller, which the City has been without since 2011. The comptroller's function is to audit government accounts and sometimes certify expenditures.
Brown's administration will present Council with a tentative annual budget proposal for fiscal 2012-13 on June 3, up from typical submittal date of May 1.
Brown must submit his formal budget for the upcoming year by July 15.
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