Politics & Government

City: $1M Revenue Surprise Won't Likely Happen Again

The additional revenue was largely a result of an increase to the sales tax rate that happened after the city drafted its 2011 budget, city officials said.

The city generated about $1 million more in revenue during fiscal year 2011 than expected—but it’s a surprise windfall that City Administrator Bryon Vana said Monday is unlikely to happen again.

The sales tax rate, which accounted for much of the additional revenue, increased after the city finalized the 2011 budget, Vana said. Fiscal year 2011 ran from May 1, 2010 to April 30, 2011.

“By the time we do the budget in February, it’s a little bit of an educated guess, because some of the numbers haven’t come in yet,” he said.

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Increased sales tax revenue accounted for about $142,000 of the unanticipated funds, according to the 2011 audit, which was presented at Monday’s . Telecommunications tax revenue was the second largest source.

Alderman John Poteraske asked what measures the city was taking to ensure it didn’t experience a similar discrepancy between the budget and the final audit in subsequent years.

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“It was a nice surprise,” he said. “But what really is at the back of my mind … what if it had been the other way around? We wouldn’t have been so happy.”

City auditor Lou Karrigon, of the accounting firm Sikich, said it’s very common for communities of Darien’s size to see a difference between actual and projected expenditures as they add up their receipts on a monthly basis.

Treasurer Michael Coren said that there wouldn’t be an unanticipated shortfall in revenue in the future unless the sales tax rate were to decrease sharply or the economy were to take a catastrophic dip as it did in 2008.

Conversely, he said he didn’t anticipate another surprise windfall next year.

“The only reason there would be a differential would be if the economy really takes off and people really start spending a lot more money,” he said. “Then obviously our sales tax revenue would go up.”

The city’s financial records received an unqualified opinion from Sikich, which is the highest level of assurance auditors give to the quality of a city’s financial reporting, Karrigon said.

Of the 30 to 40 audits he conducts a year, Karrigon said all but five typically receive an unqualified opinion.

The city's 2011 audit is available for review on its website.


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