When the city of Sedona closed its books on the 2009-2010 fiscal year it ended up with a surplus of a little more than $750,000 in the general fund.

The city generated a little more than $11.2 million in revenues in the general fund, and expenditures totaled almost $10.5 million.

Assistant City Manager Alison Zelms said the city did not anticipate having this kind of a surplus.
She said cost adjustments and slight cost reductions were reasons for the surplus.

Some of the cost adjustments and reductions involved eliminating a few city positions in late 2009.

Miscellaneous items involved auctions for vehicles, outdated computer equipment and furniture which resulted in $445,000 more than what the city projected, she said. 

Revenue categories coming in lower than projected included bed sales tax, state sales tax, court fines and miscellaneous charges for service and interest.

The budgeted city sales tax for the 2009-2010 fiscal year was projected to be almost $4.5 million.

However, the city actually generated close to $4.9 million, resulting in an increase of $403,000.

The bed tax in the same time frame came in $340,000 lower than projections.

According to an interoffice memorandum from Finance Operations Manager Barbara Ashley, the midyear reductions resulted in a 13 percent decrease in expenditures.

In her memorandum, she reported the midyear adjustments to revenue allocations did better than anticipated and created $390,000 in excess revenue over the budget amount.

Zelms said the city was also conservative when budgeting for revenue it was expecting to receive.
“It came in slightly better than we expected,” she said. The goal was to balance the general fund, so the extra $750,000 was a pleasant surprise.

The $750,000 will go into cash reserves in the general fund, she said.

The city, when closing its books for previous fiscal years, usually has had a small surplus, but projected revenues for the 2009-2010 fiscal year would be lower.

“We wanted to have a conservative outlook on revenues,” Zelms said.

The 2009-2010 surplus comes very close to replenishing reserves used in the 2008-2009 fiscal year, she said.

Mayor Rob Adams said he is not surprised the budget is balanced. He was anticipating a surplus of about $350,000, not $750,000.

“I think we were very cautious when we set the budget. We were trying to anticipate additional cuts,” he said in explaining why the surplus amount was so high.

Adams said the 2009-2010 budget was conservative because the city and City Council wanted to err on the side of caution.

The early numbers for the 2010-2011 fiscal year are a little encouraging, Zelms said.

The city anticipated its revenue stream in sales tax numbers would decrease another 7 percent, but Zelms said this has yet to be seen.

However, Zelms said the early numbers are just a small snapshot of where the city could wind up. The finances from one or two months of a fiscal year might not continue.

The July 2010 figures revealed the overall revenue collections increased by about 12 percent from July 2009 while expenditures decreased by around 15 percent.

As the year progresses, Zelms said the city will have more confidence in the numbers.

Adams said he feels very comfortable with the current budget because the increased sewer rates, city collection of sales tax and audits were not included in the budget.