From Orange County Commissioner Bryan Nelson
Last week, Orange County released its Revenue Monitoring Report for the quarter that concluded on December 31, 2017. The report provides information on the County’s 12 major revenue sources; a comparison of the current year’s actual revenues with both the current year budget and actual revenues from the year before; and contains an executive summary that highlights important information regarding the revenue sources.
According to the executive summary of the report, the 12 major revenue sources represent 87.4% of the total County revenues.
Compared to the current fiscal year budget, aggregate collections were 8% (a little over $58 million) below the projections originally made, despite 9 of the 12 revenue sources have either met or exceeded their budgeted amounts. Revenue sources that were within the 5% statutory deduction and required to be budgeted were considered to have met their budgeted requirements. In addition, of the revenue that experienced increases, Public Service Taxes, Fuel Taxes, State Revenue Sharing and Solid Waste Tipping Fees experienced growth in the double digits, with interest-earning pushing them further into the triple digits.
Compared to prior fiscal year revenues, aggregate collections were up to 10.7% (approximately $64 million). The County experienced increases in 9 of the top 12 revenue sources, including Ad Valorem Taxes, Solid Waste Tipping Fees, and Interest Earnings, who all increased by double digits. The other following 3 revenue sources had experienced revenue declines: Public Service Taxes (2.4%); Convention Center Operating Revenues (16.5%); and Impact Fees (32.9%).
Ad Valorem Tax collections for the first quarter of Fiscal Year 2018 totaled at $394,328,919, and the total collections for the first quarter of the Fiscal Year 2017 were $338,199,462 (16.6% or $56,129,457 increase). However, this revenue source did experience a 16.1% ($75,497,251) decrease and fell short of meeting its budgeted expectations; the budget for Fiscal Year 2018 for the first quarter of Ad Valorem Taxes was $469,826,170 and the Actual Fiscal Year 2018 for the first quarter was $394,328,919. This indicates that the pace of collections is slower than what has been recently experienced, where the budget expectation is based on historical monthly receipts over the last 3 fiscal years.
For the first quarter of Fiscal Year 2018, Public Service Taxes exceeded budgeted projections by 10.2% due to stronger than expected collections. Specifically, first quarter tax collections from electric service outplaced its budget by $2.6 million (approximately 15.8%), while collections from water service exceeded its budget by $267,000 (11.5%).
Fuel Tax collections in the first quarter of the fiscal year exceeded budget projections by 18.3%. Current actual revenues exceeded prior year experience by 4.3%; this finding is largely attributable to the Local Option Gas Tax (representing 59.7% of the gas tax collected) and increased by 3.9% compared to the first quarter of Fiscal Year 2017 and 13.6% over the current year budget.
State Revenue Sharing receipts exceeded budget projections by 10.4% and prior fiscal year first quarter receipts by 4.3%. This increase is attributable to the recalculation of amounts by the State distributed to the counties beginning July 1, 2017.
Overall Impact Fee revenue failed to meet budget projections for the first quarter of Fiscal Year 2018 by 16.8%, while also falling short of prior year collections by 32.9%. This source’s failure to meet its budgeted expectations is due to Connection Fees, which comprise 57.4% of Impact Fee revenues, failing to meet its budget projection by 20.2% and its comparable prior year collections by 45.5%.
Solid Waste Tipping Fee revenue for the first quarter of Fiscal Year 2018 saw a 32.9% increase over budget revenue and a 16.9% increase over prior year revenue. These increases can be credited to the continued improving economic conditions and growth in Orange County, which generates additional tonnage received at the landfill.
Interest Earnings exceeded the current year budget by 174.6% and prior year collections by over 43%. These results are attributable in part to an increase of 7.8% in the average daily balance of the investment portfolio for the first quarter of Fiscal Year 2018, as well as an increase in the effective rate of return from 0.97% to 1.28% over the same time period last year.
Residents seeking more information or who wish to read the full report can access it here.