Revenues Overview

Overview

The major revenue sources for the City of Salida are Sales Taxes (City & County), Fees for Services, State and Federal Grants and Other taxes (Lodging & Franchise Fees).

Total Revenue budgeted for 2022:

Estimated Revenues

1. General Fund $ 12,167,509

2. Water Fund $ 6,344,600

3. Wastewater Fund $ 2,180,000

4. Conservation Trust Fund $ 74,000

5. Streets Fund $ 4,324,605

6. Capital Improvement Fund $ 1,146,151

7. Economic Development Fund $ 191,500

8. Lodging Tax Fund $ 516,000

9. Housing Fund $ 120,000

Revenue Assumptions for 2022 Budget

An important consideration when developing the budget is determining a revenue estimate. The City looks at trends for key local revenue sources like sales tax and fees for service and also considers economic indicators (inflation, local housing starts, population changes, etc) to come up with a conservative estimate. Assumptions are vetted through the Finance Committee and compared with other governments. City staff also estimate what the beginning available fund balance will be which could be utilzed for one time only needs in the upcoming budget year. Once estimated revenue is in place, it is possible to determine the amount available to meet the many requests for funding in the budget. Requests are prioritized against available resources and spending is not recommended unless revenues support the spending.

Key revenue assumptions built into the 2022 budget are:

1. City and County Sales tax is projected to be $2.5M or 24% higher than 2020 actual, which is only slightly ahead of 2021 projected actual.

2. Recreation and Event Fee revenue is budgeted to match pre-pandemic 2019 revenue.

3. $764K in American Recovery Funds are anticipated to match the $764K already received in 2021. Spending of this revenue is restricted by the federal government and will likely go toward affordable housing projects in the community.

The below narratives and graphs describe overall revenue sources and provide further detail for revenue of the 3 major fund groups (General, Streets and Water & Wastewater Utilities)

Sales Tax

Combined City and County sales tax collections make up nearly half of all City revenues. The City sales tax is allocated 58% to the General Fund, 32% to the Streets Fund, 8% to the Capital Improvement Fund and 2% to the Economic Development Fund.

Since sales tax is a critical revenue source, trends are closely watched. 2022 sales tax revenue collections are anticipated to mirror the historically high 2021 levels; however the City will adjust spending if a downward trend is noted in the monthly tracking of this revenue stream.

It should be noted that as a statutory city, the state collects sales tax on behalf of the City of Salida, thus there is a delay of two months before the City knows what a month's collections are (i.e., the State collects sales tax generated from January sales in February, and forwards the funds collected to the City in March). Monthly sales tax reports can be found here.

Revenue Trends over Time (excluding interfund transfers)

General Fund

The City of Salida's revenues accounted for in the General Fund include sales and other taxes, various user charges, state and county shared revenues and grants, and investment earnings totaling $12.2 million. Click on the various sections of the graph below for more detail on revenue grouped in each section.

General Fund - Intergovernmental Revenue

The main revenue within the "intergovernmental" revenue grouping is the sales tax earned by Chaffee County and shared with the City through a long standing revenue sharing agreement. Other revenue within this section includes tax revenues shared by the state (i.e. Cigarette Tax, Motor Vehicle Registrations) and various state or federal grants that the City is awarded from time to time.

General Fund - Fees for recreation and event services

The Parks & Recreation and Arts & Culture departments charge fees directly to users of the Hot Springs Aquatic Center and for various programs and events to help offset the City's cost of offering these services.

Park usage and many events open to the public are free of charge; sales tax provides the revenue source that supports the cost of these important amenities.

Streets Fund

The Streets Fund is a major fund for the City which warrants further disclosure of its revenue sources. The Streets Fund receives a 32% allocation of the 3% City sales tax. In 2022, a grant award from the Colorado Department of Transportation (CDOT) will offset the cost of a Safe Routes to School project. Capital revenue is typically the revenue received when equipment is sold.

Water and Wastewater Funds

The Water and Wastewater Funds are enterprise (business-like) funds that are not supported by taxes; rather, fees are generated directly from users of the services. The Fees for General Services represent the fees charged to citizens based on usage (i.e. gallons of water used). Capital Revenues are tap fees charged to developers for new development projects. Debt issuances are also classified as capital revenue. In 2022, a debt issuance will fund significant water system projects described in detail in the Capital Projects section of this report.