FY 24-26 ADOPTED BUDGET

Major Revenue Assumptions (continued)

Sales Tax The sales tax revenue for FY 24 - 25 and FY 25 - 26, before rebates, is $12.9 million and $13.3 million, respectively. For FY 24 - 25, this represents an increase of less than 3% from the prior year. However, this is still better than the prior forecast from our sales tax consultant, HdL, of a slight decrease. This latest forecast reflects a gradual descent in financing costs in the back half of 2024 with households continuing a path of placing greater spending priorities on essential items. Overall, consumer spending remains resilient despite high inflation.

Transient Occupancy Tax

$10 $12 $14 $16 $18 Millions

$- $2 $4 $6 $8

Street Fund (202) The Street Fund is a special revenue fund used to account for the receipt and disbursement of State and Federal gas tax and grant monies, and other monies that are to be used for the maintenance, repair, and design of streets. State gas tax funds are distributed to cities based on population from gas taxes collected at the point of sale. The use of gas tax funds is restricted to street expenditures by State and Federal laws. Revenues for street maintenance are realized in this fund and are then transferred to the General Fund. In FY 24 - 25 and FY 25 - 26, gas tax revenues are expected to stay flat or no growth of approximately $0.9 million in each year. The six - year forecast assumes this revenue category to remain flat in the out years. Development Services Fund (206) The Development Services Fund accounts for the City's planning, building, and engineering activities. The Fed ’ s two - year drive to tame inflation unleashed the steepest series of interest rate increases in decades and is having a negative impact on development as developers continue to

Sales Tax

$10 $12 $14 $16 $18 Millions

$0 $2 $4 $6 $8

Transient Occupancy Tax As for the City ’ s Transient Occupancy Tax (TOT), or hotel tax, based on the current occupancy estimates and the projection of occupancy and daily rates, revenue is anticipated to remain below pre - pandemic levels until FY 25 - 26. It is estimated that FY 23 - 24 hotel tax revenue will come in at a lower amount of $2.6 million versus the budget amount of $2.8 million. The estimates for FY 24 - 25 and FY 25 - 26 are $2.7 million and $3.0 million, respectively. The higher growth rate for FY 25 - 26 reflects the opening of an additional hotel.

The six - year forecast period assumes steady growth of 3 percent in future years.

BUDGET SUMMARY 93