14 minute read
Revenue Analysis
General Fund
The General Fund is the primary operating fund of the City. It provides the financial resources for the majority of City programs and services including general administration, capital programs, courts, economic development, planning, zoning, and inspections, health and social services, libraries, public safety, public works, parks and recreation, and tourism. General Fund revenue is comprised of general property tax revenue (65%), other local tax revenue (20%), revenue from fees and charges (3%), state revenue (9%), federal revenue (2%), and fund transfers (1%). General Fund revenue is projected to increase 10.6% over the previous year to $263.1M in FY 23.
General Fund Revenue
FY 20 Actual FY 21 Actual FY 22 Budget
FY 22 Projected
FY 23 Adopted
General Property Taxes $ 139,982,189 $144,417,955 $149,969,846 $ 154,764,890 $
169,667,755 Other Local Taxes 48,710,560 53,092,028 47,706,203 55,067,145 53,981,203 Revenue from Fees and Charges 11,723,929 7,499,611 8,299,003 7,821,163 8,278,493 State Revenue 21,639,609 23,077,822 22,783,428 23,034,945 22,974,966 Federal Revenue 5,434,916 5,280,895 5,127,404 5,132,429 5,233,702 Fund Transfers 2,695,930 2,907,451 3,930,647 2,930,647 2,915,074 $ 230,187,133 $236,275,762 $237,816,531 $ 248,751,218 $ 263,051,194
State 9%
Fees & Charges 3%
General Fund Revenue
Federal 2%
Fund Transfers 1%
Other Local Taxes 20% General Property Taxes 65%
General Property Taxes
General property taxes account for approximately 65% of General Fund revenue and consist of taxes on real estate, personal property (i.e. airplanes, boats, cars, trucks, trailers, mobile homes, recreational vehicles and machinery and tools), public service corporation taxes, and penalties and interest.
Real estate tax revenue is the City’s largest source of revenue, comprising 51% of General Fund revenue. A 14% or $16M increase in real estate tax revenue is projected in FY 23 which is attributed to assessed value growth and new construction. The assessed value of real estate increased 13.61% due to reassessment. Assessed value growth of existing properties accounted for 10.81% of the increase, while new construction garnered 2.79% of the total increase in assessed value. The real estate tax rate will decrease from $1.11 to $1.09 per $100 of assessed value in FY 23 to provide tax relief to citizens.
Personal property tax revenue, which accounts for nearly 11% of General Fund revenue, is projected to increase 12% or $3M in FY 23. The projected increase is based on an analysis of current assessed values and historic trends. The used car market is particularly strong at this time due to supply chain issues and microchip shortages. As a result, personal property assessed values are significantly higher. In order to provide a measure of tax relief, the adopted budget provides forthe assessed value of certain cars and trucks to be assessed at 75% of fair market value in FY23.
$100,000,000
$80,000,000
$97.6M
Real and Personal Property Tax Revenue
$104.0M $107.9M $111.8M $120.9M $134.3M
$60,000,000
$40,000,000
$20,000,000 $29.0M
$22.0M $23.8M $26.0M $26.3M $27.4M
$0
Real Property Personal Property FY 23 Budget
Other Local Taxes
Other local taxes include levies on sales and use, communications sales, utilities, business licenses, motor vehicle licenses, bank stock, recordation and probate, tobacco, admissions, lodging and meals. Other local tax revenue is projected to increase 13% or $6.2M in FY 23 as the local economy has rebounded from the pandemic and the City continues to grow. Local taxes driving the 13% increase include sales and use tax (15%), business license tax (24%), meals tax (23%), and lodging tax (14%). Tobacco tax revenue has declined over the last few years and is projected to decline in FY23 by 16%. Sales and use tax revenue is benefitting from the levy of sales tax on internet sales which began in July 2020 in Virginia. New residential, office, commercial, retail, and restaurant developments in central and northern Suffolk are continuing to have a positive impact on local tax revenue.
Revenue from Fees and Charges
Revenue from fees and charges account for 3% of all General Fund revenue and consist of permits, privilege fees, and regulatory licenses; fines & forfeitures; revenue from the use of money and property; charges for services; miscellaneous revenue; and recovered costs. Revenue from fees and charges is projected to remain flat at $8.3M in FY 23 as compared to the FY22 budget.
Permits, Privilege Fees, and Regulatory Licenses
Revenue from permits, privilege fees, and regulatory licenses consists of fees for animal licenses, land use applications, land transfers, zoning, use and ordinances, building and weapons permits, borrow pit fees, and fishing and other miscellaneous permits. Revenue from permit, privilege fees and regulatory licenses are projected to increase 13% or approximately $195,000 in FY 23. The increase is due to building permits which have trended higher in recent years.
Fines & Forfeitures
Revenue from fines and forfeitures is comprised of General District Court fines, parking fines and violation fees, and false alarm violation fees. Revenue from fines and forfeitures is projected to decrease by 15% or $125,000 in FY23 due to the projected decrease in General District Court fines which have trended lower in recent years.
Revenue from Use of Money and Property
Revenue from the use of money and property consists of interest earned on investments, bond proceeds, and the rental of City facilities. Revenue from use of money and property is projected to decrease by 28% or $323,933 in FY 23. The reduction is primarily due to a decline in interest rates.
Charges for Services
Charges for Services include fees and charges for emergency medical service, court security, animal adoptions, recreation and special events, grave openings, and sale of service revenue to other City funds. Revenue from charges for services is projected to increase by 10% or $353,560 in FY 23 due to a projected increase in EMS fees and grave openings.
Miscellaneous Revenue
Miscellaneous revenue is comprised of delinquent tax collection fees; tourism gift shop sales; gifts, donations, and contributions and payments in lieu of taxes from the Suffolk Redevelopment and Housing Authority. Miscellaneous revenue is projected to decrease by $192,000 in FY 23 due to a projected decrease in delinquent tax collection fees which have trended lower the last two years.
Recovered Costs
Recovered costs include reimbursements from other governmental agencies such as Suffolk Public Schools and the Western Tidewater Community Service Board for services provided to these entities by City departments. Recovered cost revenue is projected to increase by $71,864 in FY 23.
State Revenue
Revenue from the Commonwealth of Virginia represents approximately 10% of General Fund revenue and includes non-categorical aid, shared expenses, and categorical aid. State revenue is projected to increase by 1% or approximately $191,538 in FY 23. The increase is primarily due to additional public assistance and wireless E911 grant funding.
Non-Categorical Aid
The City receives various sources of non-categorical aid from the Commonwealth of Virginia including motor vehicle carrier, mobile home titling, rolling stock, deeds/grantors, and vehicle rental tax revenue, as well as House Bill 599 (police operational aid) and personal property tax relief funding. Non-categorical aid is projected to remain flat FY 23.
Shared Expenses
The City receives funding from the Commonwealth of Virginia Compensation Board for the shared expenses of operating state-assisted local offices including the offices of the Commonwealth’s Attorney, Sheriff, the Commissionerof the Revenue, Treasurer, Voter Registrar, and Circuit Court Clerk. State shared expense revenue is projected to remain flat in FY 23.
Categorical Aid
The City receives categorical aid from the Commonwealth of Virginia for specific locally administered programs and services including social services, public safety, courthouse maintenance, and library services. Categorical aid is projected to increase 4% in FY 23 to $5.5M based on state aid estimates for fire program funds, library aid funds, public assistance grants, and wireless E911 programs.
Federal Revenue
The City receives federal revenue for emergency services, the food stamp program, and temporary assistance for needy families. Federal revenue is projected to increase 2% or approximately $106,298 in FY 23.
Other Funds
In addition to the General Fund, the City also has 16 other funds which account for the proceeds of revenue sources that are legally restricted to expenditures for specified purposes. These funds include the Capital Projects Fund, the Debt Service Fund, seven special revenue funds (Aviation, Consolidated Grants, Downtown Business Overlay Taxing District, Road Maintenance, Law Library, Route 17 Special Taxing District, and Transit), three enterprise funds (Utility, Stormwater, and Refuse), three internal service funds (Fleet Management, Information Technology, and Risk Management), and one discreetly presented component unit, the Schools Fund.
Capital Projects Fund
The Capital Projects Fund budget for FY 23 is $62.1M which represents a 2% increase over FY 22. The Capital Projects Fund derives revenues from the issuance of bonds, state and federal grants, and fund transfers. The Capital Projects Fund is supported by the following funding sources in FY22: $29.9M general obligation bonds (48%), $4.8M stormwater bonds (8%), $4.5M state and federal funds (7%), $14.2M transfer from other funds (23%), and $8.7M general fund cash (14%).
Debt Service Fund
The Debt Service Fund is used to account for the payment of general long term debt principal, interest, and related costs associated with general government projects that are debt financed. Revenues in this fund are derived through the transfer of funds from the General Fund, Road Maintenance Fund, and the Route 17 Special Taxing District Fund. The Debt Service Fund budget will increase 5% in FY 23 to $30.9M.
Special Revenue Funds
Special Revenue Funds provide for revenue derived from specific sources other than major capital projects that are restricted by legal and regulatory provisions to finance specific activities.
Downtown Business Overlay Taxing District Fund The Downtown Business Overlay Taxing District (DBOD) provides for revenues and expenditures related to enhanced services provided in a specifically designated area of downtown Suffolk. Revenues are derived from an additional real estate tax levy of $.105 assessed on properties located within the district’s boundaries. The projected DBOD revenue for FY 23 will increase by 9% to $190,421.
Road Maintenance Fund The Road Maintenance Fund accounts for revenues and expenditures related to the maintenance of roads and bridges. Revenues are derived primarily from the State Urban Street Maintenance Program and sale of services to other funds. The Road Maintenance Fund budget for FY 23 is $32.3M, a9% increaseover FY 22. State revenue, which is based on a funding formula accounting for roadway miles in the City, is projected to remain flat at $25.1M in FY 23.
Consolidated Grants Fund The Consolidated Grants Fund accounts for revenues and expenditures of grant and local matching funds provided for various programs and services. Budgeted revenue includes a transfer from the General Fund, which is used for required local matching funds to state and federal grants accepted and appropriated during the fiscal year. The Consolidated Grants Fund budget for FY 23 remains flat at $660,129.
Law Library Fund The Law Library Fund provides for the operation, maintenance, and purchase of legal materials for the Suffolk Law Library. Revenues are obtained through the collection of fees on court cases processed in the Circuit and General District courts. The Law Library Fund budget for FY 23 is $50,460, a 3% increase over FY 22.
Route 17 Special Taxing District Fund The Route 17 Special Taxing District Fund accounts for revenues and expenditures related to enhanced economic development and transportation services provided in a specifically designated area of northern Suffolk. Revenues are derived from an additional real estate tax levy of $.24 assessed on properties located within the district’s boundaries. The projected revenue for FY 23 is $4,526,712, a 128% increase over FY22 due the use of fund balance to help fund a new fire station in the Route 17 Taxing District.
Aviation Facilities Fund The Aviation Facilities Fund accounts for the revenues and expenditures of the Suffolk Executive Airport. Fund revenues are comprised of fuel sales (62%), rental of facilities such as airport hangars (26%), miscellaneous revenue to include an airport usage fee (2%), and the transfer of funding support from the General Fund (10%). The Aviation Facilities Fund budget for FY 23 remains flat at approximately $1.1M.
Transit Fund The Transit Fund accounts for the revenues and expenditures of Suffolk’s transit service, which is outsourced to the Virginia Regional Transit Authority (VRTA), and includes seven bus routes and ADA service. The Transit Fund derives revenues from General Fund transfers (25%), state and federal funding (70%), fare collections (4%), and miscellaneous revenue (1%). The Transit Fund budget for FY 23 is approximately $1.7M, a 31% decrease over FY 22 primarily due to additional federal funding received in the previous fiscal year to support multi-year transit operations.
Enterprise Funds
Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent of enterprise funds is for the costs of providing goods or services to the general public to be financed or recovered primarily through user charges.
Utility Fund The Utility Fund provides for water and sewer services to City residents and businesses. All activities necessary to provide these services are accounted for in this fund, including, but not limited to, administration, operation, maintenance, billing, collections, capital financing and related debt service and fixed assets of the water and sewer systems. The Utility Fund is designed to be self-sustaining. The Utility Fund budget for FY 23 is approximately $67.1M, a 6% decrease over FY22. The Utility Fund derives revenues through charges for water and sewer service, water and sewer availability charges, bulk water sales, meter service charges, hydrant rentals, capital contributions from development, bond rebates, special fees, sale of services, and miscellaneous revenue. New customer or equivalent residential units (ERU) are projected to increase from 575 to 625 ERUs in FY23. Consumption based water and sewer rates in FY23 are as follows: the water rate will increase $.12 per 100 cubic feet to $10.43, the sewer collection rate will remain flat at $7.27 per 100 cubic feet, and meter service charges will increase $.50 per month to $13.25.
Stormwater Fund The Stormwater Fund provides for the operation, management, construction and maintenance of stormwater facilities, as well as mosquito control services. The stormwater fee will remain flat at $7.50 per month in FY23. The stormwater fee is a result of the Federal Clean Water Act of 1972 and amendments thereafter which require cities to make improvements to reduce the amount of pollution from stormwater runoff. No federal or state funding is provided to offset the cost of the water quality measures. The Fund earns additional revenue through permit and inspection fees paid by developers based on a percentage of hard surface coverage required for development and the sale of services such as engineering services to other City funds. The Stormwater Fund budget for FY 23 is approximately $8.3M, a 5% increase over FY 22.
Refuse Fund The Refuse Fund accounts for the revenues and expenditures of the City’s refuse collection and recycling services which include citywide refuse, recycling, and bulk refuse pickup. The Fund is designed to be self-sustaining through revenue generated by fees for refuse collection, the sale of trash cans, sale of service to other City funds, and landfill host fee revenue. The Refuse Fund budget for FY 23 is approximately $11.1M, a 5% increase over FY 22. The FY 22 monthly refuse collection fee will remain flat at $25.25.
Internal Service Funds
Internal service funds are used to account for the operational cost of services provided to other city departments. Revenue is derived from charges on a cost reimbursement basis. The internal service funds include the Fleet Management Fund, Information Technology Fund, and Risk Management Fund.
Information Technology Fund The Information Technology Fund provides for the operation and maintenance of the City’s technology infrastructure including computer, software, and telephone systems. The cost of operating these systems is allocated to the various city departments and agencies on a cost reimbursement basis. The Information Technology Fund budget for FY 23 is approximately $14.2M, a 3% increase over FY 22.
Fleet Management Fund The Fleet Management Fund accounts for the revenue and expenditures of the City’s centralized fleet management program including vehicle and equipment acquisition, maintenance, repairs, and fuel. Operating costs are allocated to city departments and agencies that use fleet equipment and assets on a cost reimbursement basis. The Fleet Management Fund budget for FY 23 is approximately $15.2M, a 9% increase over FY 22.
Risk Management Fund The Risk Management Fund provides for the funding and payment of auto, general liability, health and worker’s compensation claims against the City. The Fund derives revenue from the allocation of costs to City departments based on insured asset values, the number of employees per department, and estimated premiums and claims for the year. The Risk Management Fund budget for FY 23 is approximately $21.9M, a 12% increase over FY22.
Discretely Presented Component Unit
Discretely presented component units are reported separate from the primary government to emphasize that they are legally separate from the City. The Schools Fund is a discretely presented component unit.
Schools Fund The Schools Fund provides for the activities of the Suffolk Public School System. The appropriation by the City consolidates the funding for the existing three School funds including the School Operating Fund, School Food Service Fund, and School Grants Fund. Revenues are derived from local, state, federal, and other sources. The School Operating Fund budget for FY 23 is approximately $232.9M, a 18% increase over FY 22. The increase is primarily due to a $34.2M increase in state, federal, and other funding for education and a $2M increase in local funding.
General Operating Fund
