Despite last year's trying economic times, the City of Charlottesville saw a $1.7 million surplus at the end of the 2008-09 fiscal year, which will most likely go toward balancing the $2 million deficit predicted for the 2009-10 fiscal year.
"This is a combination of revenues about $255,000 over what was expected, and expenditures that were way down," Charlottesville Commissioner of Revenue R. Lee Richards said.
Because of pressures associated with the recession, city departments cut their expenditures by about $5 million, which contributed to the surplus, Richards said. At the same time, business and professional license tax revenues increased by nearly $1.5 million the last fiscal year. A large part of that increase came from the audit of a new large financial company that "did exceedingly well," Charlottesville Director of Economic Development Aubrey Watts said, explaining that the city audits companies every two years to compare its actual receipts to estimated expenditures.
"If there is a discrepancy between these two numbers, that company needs to pay the city some additional money," he said, noting that it is nevertheless rare for an audit to bring in an additional $1.5 million.
"But in the case of this particularly company, they did exceedingly better than expected and were required to pay the city a significant amount," he said.
Additionally, real estate tax revenues were $73,446 more than the expected estimate of $50.4 million. Personal property tax revenues also exceeded estimations of $6.7 million by $70,537.
The overall surplus will most likely be used to offset the next fiscal year's projected deficit.
"Oftentimes in the past, surplus funds go towards the Capital Improvement Project, not just balancing the next years budget," Richards said.
Because of the revenue deficit thus far this fiscal year, however, Council will likely decide Monday to give surplus money back to various departments, and will only use whatever funds are leftover to benefit the Capital Improvement Program, which provides funds for streets, land, public buildings and other capital assets, Watts said.
"Revenues are expected to be down this fiscal year from a broad range of categories such as real estate, lodging and food, among other things," Watts said, noting that a financial deficit has not been a recurring problem in the city's recent history. Charlottesville has seen a surplus every fiscal year since 2006, when the city received a significant $7.8 million.
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