Each year the Council adopts Financial Policies that guide budget development and financial practices. As proposed, there is a single change to the existing Financial Policies to increase the amount of construction sales tax that will be recognized as ongoing from $6.1 million to $6.5 million. All other policies are unchanged.

Adopt the FY2024 Financial Policies. (Ryan Bittle, Finance Manager)

These policies guided development of the FY2024 budget. The recommended action will reclassify or shift an additional $400,000 of Construction Sales Tax to ongoing status in the General Fund. Whether the change in the amount allocated to ongoing General Fund is approved or not, the total Construction Sales Tax revenue estimated is unchanged.

The Financial Policies are adopted annually with the last update approved by City Council in March 2022. The proposed revision was discussed at a Work Session held on February 4th as part of the FY2023 and FY2024 update and five-year General Fund forecast.

The adopted financial policies call for an annual review of the portion of General Fund Construction Sales Tax allocated to ongoing purposes. The analysis of revenue for the most recent ten years as shown below has been used to assess the base level of Construction Sales Tax revenue that would persist through an economic trough to support ongoing operations. Using the lowest of these measures sets the ongoing portion of Construction Sales Tax at $6.5 million. This is the same basis used since the policy was adopted in the FY2020 Budget. The General Fund forecast estimates Construction Sales Tax revenue to exceed $23.5 million per year through FY2028.