City to deploy new revenue forecast model

Official: Report should be lead to more accurate budgeting, transparency

Jefferson City government has developed a new model to track and project revenues. See the full document depicted above via the link within the article below.
Jefferson City government has developed a new model to track and project revenues. See the full document depicted above via the link within the article below.

An effort to ensure more accurate budgeting at City Hall also has led to what one official hopes will be increased transparency and understanding of Jefferson City's budget.

Interim Finance Director Bill Betts unveiled a new revenue forecast model to members of the Finance Committee last week and is preparing to show the same report to the full City Council on Monday.

The model, which Betts said took about six months to build, shows each category of revenue that contributes to the city's general fund and shows an estimation of revenue for each category, essentially predicting whether revenues will meet projections.

The first report, dated Jan. 31, projects the city will end the 2014 fiscal year $142,075 above budgeted projections.

Betts said staff took two-year averages of each line item to get the initial estimates and predictions, then turned to any variables or trends staff knew about to get a more realistic number. For example, Betts said, the two-year average for building construction fees wouldn't take into account the Capital Region Medical Center expansion, which would bring thousands more into that revenue stream.

"There's science and math to the initial number, then it's common sense," Betts said. "If we know things are going to happen, we should build those in."

As the model is used each month, Betts said it will improve and get more accurate numbers, because of the additional data being plugged in. The report being released this week predicts sales taxes will come in $23,000 under projections, but that's because the model is using information from Jan. 31, when sales tax receipts were down. February receipts showed the city was above projections in all its sales taxes, information that likely would change the model's prediction.

Betts said the February report would be ready by the March 13 meeting of the Finance Committee.

Ultimately, Betts said the model should help prevent sudden budget issues, such as the $1.68 million budget shortfall discovered last year. The model will be able to show officials when a revenue stream may have an issue and help highlight it before becoming a bigger problem.

"We'll see it before it happens, hopefully," Betts said.

But one of the driving forces behind building the model in the first place was a simple desire to educate the public on the city's various revenue streams.

"People always talked about sales tax," Betts said. "Sales tax is 30 (percent) to 33 percent of our budget, but there's another 67 percent that we're kind of ignoring."

Betts said he hopes the report will help educate the public about the 13 different revenue categories and how they work.

"Sales tax does tell a story ... but when it comes to our budget, the story is 13 categories," Betts said. "At the end of the day, we care about the budget as a whole."

The initial report is available here. It will be posted on the city's website, www.jeffcitymo.org, on Tuesday morning. Betts said a new report will be uploaded to the site monthly for anyone to view. He said he hopes people take a look and give input on how the model can be improved or altered to give people the clearest picture of the city's budget.

"Ultimately, our goal is to be transparent about where we think the numbers are," Betts said.

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