Nov. 9--FARMINGTON -- Tax revenue paid by businesses to the city fell more than 17 percent during the first quarter of the budget year versus the same period last year.

Gross receipts tax revenue to the city declined 17.3 percent during the first quarter compared to last year's first quarter, according to a report delivered at Tuesday's City Council meeting. The first quarter runs July through September.

The city received $12.2 million in gross receipts tax revenue the first quarter, a decline of $2.6 million from the same period last year, according to the report, delivered by Administrative Services director Andy Mason. More than $9 million of gross receipts tax revenue went to the city's general fund.

The general fund contributes money for road work, park improvements, police and fire departments, the library, building and vehicle maintenance, municipal court and other departments. Gross receipts revenue funds about 80 percent of the city's $50.1 million general fund.

Revenue to the city's general fund has declined 9.3 percent versus the same period last year, according to a financial report.

The city received $11.8 million in general fund revenue July through September this year compared with $13 million the same period last year. The $11.8 million was 5.2 percent less than city officials expected.

Addressing the shortfall

The city adjusted to the revenue decline by spending $637,000 less than authorized by the

budget, City Manager Rob Mayes said.

"It's a grassroots effort from our employees in the field to management to just watch every single penny," Mayes said.

City leaders are watching spending closely, including postponing purchases of vehicles, Mayes said. The city is being "very cautious" when considering which jobs to fill when they are vacated.

The city cut its budget earlier this year by $6.2 million, including the elimination of 27 jobs through attrition.

"We closed the first quarter in a good position based on the early intervention of ... the two separate, formal budget cuts we did in June and in September," Mayes said.

The city was able to avoid pay cuts, furloughs and layoffs through the "significant cuts" and Mayes remains optimistic the city can continue to avoid them, he said.

The Daily Times previously reported the city aimed to cut 60 jobs, but Mayes said he only presented the additional 30 jobs cuts to councilors as a "hypothetical."

The city isn't planning to cut 30 more jobs, he said.

How sectors fared

The city received 4.8 percent less in gross receipts tax revenue than forecasted in the budget, Mayes said.

Retail businesses, the city's largest sector, paid $5 million in gross receipts tax revenue the first quarter, a 14.5 percent decline from the amount the sector delivered during the same period last year.

The natural gas and oil industry paid $800,000 to the city, a 31.9 percent fall-off. The service sector paid $2.6 million, a 17.9 percent drop, and the construction sector paid $900,000, a 2.5 percent reduction.

Utility surpluses

Though general fund revenue declined, the Farmington Electric Utility System gained $6.7 million in the first quarter of the budget year, according to the financial report. The Electric Utility received $26.4 million in revenue and spent $19.7 million.

Similarly, the city's water fund collected $4.3 million in revenue and spent $3.1 million, according to the report.

Mayes explained the revenue would fund ongoing capital projects, such as pipes that carry drinking water, and future projects, such as an additional power plant.

The city's Electric Utility is considering building another power plant to keep customers' electricity rates stable, and the utility has saved millions of dollars to fund the expansion.

Mayes called the quarterly financial report a "three-month snapshot." All kinds of factors can account for utility revenue surpluses, including grants received from other funding sources.

Steve Lynn:

slynn@daily-times.com

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