September meals tax up 2.6%

September 2010 meals tax collections exceeded September 2009 by 2.6%. Additionally, we remain ahead of budget projections for the current fiscal year. This is great news as it indicates that overall business for restaurants has increased - people are spending more money at restaurants in the city than expected.

Year to date, Roanoke City Public Schools have received $35,000+ more than they had expected or budgeted for. If the trend remains and meals tax revenues continue to meet or exceed expectations, our schools will receive the funds budgeted for and our city restaurants will have improved business overall.

I'll continue to update the numbers monthly.

City Approves Much-needed Updates to Financial Policies

Over the course of the last couple of years, we've discussed at length the need to put in place stricter and more financially sounds practices, saving money for economic conditions like the one we are in presently. Though it's taken a bit longer than I would have hoped for, Council adopted new policies to create "savings" accounts that will help to stabilize our bond rating, provide adequate reserves for risk management and self-insured claims, and provide a fund that has resources to dip into if necessary during a "rainy day."

I don't think this accomplishment of the city received enough attention last week. This was a policy passed based on economic conditions and the belief that we should be much better prepared for potential future downturns. It is an aggressive and responsible step towards ensuring the long-term financial stability of the city. I'm proud we took this step.

Below is a summary of the new policies:

1) Maintain the undesignated reserves at 10% and structure the risk management reserve. The city should fully fund those two reserves first by dedicating incremental revenue of $250,000 to $500,000 (.1% to .2% of today's budget) to funding of reserves, subject to funding availability and our overall progress in funding of reserves. We will fund those two reserves by FY 2016.

2) Once revenues recover to their peak level (FY09) as adjusted for CPI
and any permanent tax rate increases, establish an Economic Downturn/Budget Stabilization reserve of up to 5% of the budget. This reserve will be funded by allocating incremental funding of 10% of the growth in local revenues annually until the reserve is at the 5% level.

3) If we reach revenue recovery as mentioned in #2 but have not yet
completely funded the reserves cited in #1, it is understood that the
funding must first be used to complete the reserves listed in #1 before
contributing to the reserve in #2.

4) The city will use real estate, personal property and public service
corporation assessed values in our formal AV ratio policy, however we will maintain compliance from an internal perspective by applying only real estate assessments to the 4% limit.