General fund revenue and expenditures changes
The following charts highlight the major changes in revenues and expenses from last year’s budget:
The City also publishes a Budget in Brief which is located on the City’s website here
Revenue estimates are developed with a conservative and practical approach based on general economic conditions, historic experience, and expected changes in activities and services. A team consisting of the City Manager, the Treasurer, the Commissioner of the Revenue, the Chief Financial Officer, and the Finance Director prepares operating revenue projections for the General Fund. For all other Funds, individual Department Directors are responsible for projecting revenue.
General Fund Major Local Revenue – Trend Data
General Fund - Major Revenues
An analysis of changes in the major General Fund categories of revenue is as follows:
The largest category of revenues for the City. Local taxes comprise 88.7% of all fiscal year 2024 General Fund revenues. The local tax category is expected to increase approximately 11.8% or $10,635,500 compared to the adopted fiscal year 2023 budget. Economic improvements have positively impacted most areas in this category, most notable in the sales tax category. Increases and decreases in major revenues or categories of revenue are noted below:
1. Real Property Tax – $4,333,600
The real estate tax is the single largest source of revenues for the City of Winchester. Real property taxes are expected to increase significantly in fiscal year 2024. The City reassess real property every two years. Overall real property assessment values increased by 29.5% in fiscal year 2024, while taxable values increased by 26.9% during the two-year period. Assessments on new construction are completed throughout the year. The City’s next reassessment will be effective January 1, 2025. For fiscal year 2024, the rate at which taxes on real property are assessed is $0.83 per $100 of assessed value.
2. Personal Property Tax – $1,084,000
Personal Property taxes are expected to increase 7.0% over the fiscal year 2023 adopted revenue budget due to rising personal property values. The Commissioner of the Revenue changed the assessment valuation method to mitigate the tax increase to citizens. Personal Property taxes are levied on all tangible property owed within the City’s limits, including registered vehicles and business furniture and equipment. Mobile Homes are also included in this category for taxation purposes. Rates for business furniture and equipment remain unchanged from last year at $4.50/$100 assessed valuation. Rates for all other personal property including vehicles increased effective July 1, 2017 to $4.80/$100 assessed valuation, this new revenue neutral rate eliminates the annual license fee ranging from $10 to $36 per year and incorporates into the new rate.
3. Sales Tax – $300,000
Sales tax is anticipated to increase 2.4% over the fiscal year 2023 adopted revenue budget based on trends. Sales Taxes are revenues received by the City from the 5.3 cent State sales tax generated within the City. While sales tax initially declined in fiscal year 2021 due to COVID-19, growth in fiscal years 2022 and 2023 in sales tax revenue has been positive and we project that this positive trend will continue to be strong as confidence in the economy improves.
4. Business and Professional License Tax - $1,486,050
The business license tax revenue is typically a good economic indicator on the strength of the local economy. Business license tax is expected to increase 19.5% over the fiscal year 2023ted budget. Fiscal year 2023 growth in this revenue has been positive and we project that this positive trend will continue to be strong as confidence in the economy improves.
5. Meals Tax – $2,022,500
Meals tax is a consumer-driven source of revenue and another major revenue source for the City of Winchester. The current Meals tax rate is 6.0%. Meals tax revenue is expected to increase 21.2% over the fiscal year 2023 revenue budget. Meals tax revenue decreased during fiscal year 2021 due to the COVID-19 virus, but has recovered in fiscal years 2022 and 2023, we are projecting it to continue to increase during fiscal year 2024.
Charges for Services/Miscellaneous - $719,200
The Charges for Services category is the smallest revenue category. Most of the revenue in this category is generated from fees charged for services rendered to our citizens. This category comprises only 4.6% of the General Fund revenues. The major charges for services categories are discussed as follows:
1. Permits, Fees, and Licenses – $206,200 – This category of revenue is comprised mainly of inspection fees and permits related to the construction industry. The increase is mainly due to an increase in building permit fees to be implemented in fiscal year 2023 and fiscal year 2024.
2. Charges for Services – $260,700 – This category of revenue consists of fees for services, such as fire inspection, false alarm, and parks and recreation fees. The increase is due to an increase in the monthly sanitation fee to $8.00 for a 35-gallon container; $10.00 for a 65-gallon container; and $12.00 for a 95-gallon container. This is the third year of a three year plan to increase the sanitation fee.
3. Recovered Cost/Miscellaneous – $252,300 – Revenues in this category include interest earned on investments and recovered costs such as landfill recycling. The increase in this category is mainly due to the general property rents from the Social Services Building.
Intergovernmental Revenue - $715,600
This revenue category is primarily comprised of State funds designated for specific programs. There is little local discretionary use of these funds, much of which is paid to the City on a reimbursement basis. This category represents only 7.5% of the total General Fund revenue budget. The fiscal year 2024 revenue estimate is projected to increase 9.5% from the fiscal year 2023 adopted budget. The major categories of intergovernmental revenue are discussed as follows:
1. Non-Categorical Aid – $125,000 – This category of State taxes is comprised of revenues from personal property tax relief, rental car, recordation, rolling stock taxes, and local aid to the Commonwealth. The largest source of revenue in this category is personal property tax relief. The amount provided by the State is frozen at approximately $2.6 million annually.
2. Shared Expenses – $234,600 – This category of revenue accounts for reimbursement to the City for the State share of salaries and operating expenses of the Constitutional Offices including the Commonwealth’s Attorney, Sheriff, Treasurer, and Commissioner of the Revenue.
3. Other Categorical Aid – $356,000 – This category of revenue consists of State 599 police funds and Federal grants funding. The increase in revenue in this category is due to State one-time grant funding in fiscal year 2024 for public safety.
Special Revenue Fund Revenues
1. Social Services Fund – Estimated revenues for the Social Services Fund total $12,996,000, an increase of $984,000 over the fiscal year 2023 budget. Fiscal year 2024 revenues are mainly comprised of state revenues totaling $4,686,927, an increase of $98,428 or 2.1%; federal revenues of $ 4,325,880, an increase of $421,037 or 10.8%; and General Fund support of $3,983,193, an increase of $464,535 or 13.2%. The revenue increases include funding for 1 new position and increased costs in the Comprehensive Services Act (CSA) program.
2. Highway Maintenance Fund – Estimated revenues of the Highway Maintenance Fund total $4,387,000 an increase of $717,000 from the fiscal year 2023 budget. Fiscal year 2024 revenues are mainly comprised of state revenues of $4,000,000 for the maintenance of City streets.
3. Transit Fund – Estimated revenues of the Transit Fund total $2,324,000, an decrease of ($888,000) over the fiscal year 2023 budget. Fiscal year 2024 revenues are comprised of $427,100 state revenues, an increase of $30,600 or 7.7%; and $1,407,000 in federal revenues, a decrease of ($1,231,400) due to Federal transit COVID funds; and General Fund transfer of $459,100 an increase of $312,600 or 213.4% for new equipment. The City will receive the additional Federal COVID funds in fiscal year 2024.
4. Emergency Medical Services Fund (EMS) – Estimated revenues of the EMS Fund total $1,350,000, an increase of $200,000 or 17.4% over the fiscal year 2023 budget. Revenues are comprised of fees charged for Ambulance service.
5. Winchester-Frederick County Convention and Visitors Bureau Fund – Estimated revenues of the Winchester-Frederick County Convention and Visitors Bureau Fund are $990,000, an increase of $294,000 or 42.2%. Revenues are comprised mainly from a portion of the transient lodging taxes from the City of Winchester and Frederick County. The City of Winchester increased it's transient lodging tax from 6% to 8% effective July 1, 2024, increasing its contribution from $150,500 to $317,500 an increase of $167,000 or 111.0%. Frederick County's contribution increased $129,623 or 27.2% from fiscal year 2023.
6. Law Library Fund – Estimated revenues of the Law Library Fund are $40,000, a decrease of $10,000 from the prior year and are comprised of fees collected by the local courts.
Other Funds Revenues
Capital Improvement Fund Revenues
Capital Improvement Fund revenues are estimated to be $18,967,000, an increase of $11,867,000 or 167.1% from the fiscal year 2023 budget. These revenues consist of Local funds of $500,000 a decrease of ($230,000); State funds of $2,500,00 an increase of $1,500,000 or 150.0% of revenue sharing funds for road projects; $3,137,000 in Federal funds, an increase of $137,000; General Fund transfer of $2,880,000, an increase of $1,610,000 or 126.8%; and $9,850,000 from the sale of general obligation bond, an increase of $9,850,000 or 100.0%.
Enterprise Fund Revenues
1. Utilities Fund - Fiscal year 2024 revenues are primarily derived from the sale of water and sewer services. Utilities Fund revenues are estimated to be $30,505,000 an increase of $2,543,000 or 9.1% from the fiscal year 2023 budget. The increase is comprised of $2,108,000 in charges for services due to a scheduled increase in the Water and Sewer rates; Federal revenue increase of $238,000; and an increase of $197,000 in use of reserves. The Utilities department issues revenue bonds to upgrade water facilities and replace antiquated water and sewer lines.
2. Stormwater Utility Fund - During FY 2023 City Council created a Stormwater Utility to generate fees to fund stormwater infrastructure projects within the City. The fee is effective July 1, 2024. Fiscal year 2024 revenues are projected to be $13,400,000, consisting of $1,900,000 in local fees; $3,800,000 in State revenue sharing funds; $200,000 in Federal funds; and $7,500,000 in bond proceeds.
Internal Service Funds
1. Employee Benefits Fund – Fiscal year 2024 revenues are estimated to be $750,000, an increase of $106,000 or 16.5% from the fiscal year 2023 budget. The revenues are comprised of billings to user funds and departments for worker’s compensation premiums. Also included in the revenue amount is fund balance usage for an employee incentive program and retiree health insurance premiums.
2. Maintenance Fund – Fiscal year 2024 revenues are estimated to be $3,500,000, an increase of $831,000 or 31.1% from the fiscal year 2023 budget. The revenues are comprised of billings to user funds and departments for grounds maintenance, equipment repairs and maintenance. The large increase for fiscal year 2024 is due to the City adding a grounds maintenance division during fiscal year 2022.