Big Jump For Farmington

SALES TAX REVENUE GROWS

FARMINGTON — The city of Farmington ended 2015 with good news and a nice gift for city coffers: revenue from the city’s 1-cent sales tax jumped by 16 percent in 2015, compared to the same period in 2014.

For 2014, Farmington received $561,499 from its 1-cent sales tax, from January- December. ( Sales tax receipts are based on collections made two months earlier). For January-December 2015, sales tax revenues increased to $653,189, almost $92,000 over last year and a 16-percent increase.

The city’s portion of the county sales tax also increased in 2015, compared to 2014, according to Jimmy Story, city chief financial officer. Cities receive county sales tax revenues based on their population. In 2014, Farmington received $ 983,293 from the county sales tax. For 2015, Farmington received more than a $1 million, a 7-percent increase.

Typically, Farmington’s sales tax revenues from its local tax increase about 5 percent each year.

“That’s a huge amount of money,” said Mayor Ernie Penn. “It’s a big jump, pretty awesome.”

He attributes the growth to commercial development in Farmington: a new Neighborhood Market, Kum & Go and Casey’s General Store gas stations and other new businesses.

Farmington’s Walmart Neighborhood Market opened in August 2014 so the city collected its 1-percent sales tax from Walmart sales for only a few months for that year.

“Now, we’ve had a full year of Walmart and other entities,” Penn said. “Those have definitely improved our sales tax collections. The more commercial development we can get in Farmington, the more that (sales tax revenues) will grow.”

Month to month, the city’s 1 cent sales tax receipts have been higher every month in 2015, compared to the same month in 2014, except for the month of July. In January, for example, sales tax receipts increased from $39,530 in 2014, to $56,765 in January 2015.

The highest month in 2015 was September with $57,244 in sales tax receipts. The city received its lowest amount, $52,392 in June.

Receipts from the county sales tax also were up every month in 2015, compared to 2014, except April. As far as county receipts, the highest month in 2015 was February with almost $95,000 in receipts, which would have been based on December sales. The lowest month was March with about $81,000.

With the increase in sales tax revenues, Penn said his tentative plan is to meet with city staff after the first of the year and develop a capital improvements plan for specific projects, such as improvements to Creekside Park, a new public works facility and other ideas he has.

The city’s reserve fund has $2.4 million in it and typically every year, Story transfers additional money to the reserve fund, based on yearend net income. Monday, Story said he is working on the year-end budget but estimated the city would be able to transfer more than $300,000 to the general reserve fund for 2015.

Penn said he believes it is important to have reserves equal to at least six months of the city’s needs but that the city also should look at how it can use reserve funds to make improvements to the community.

Ideally, Penn said, the city could apply for and receive matching grants to help with specific projects.

Penn