What happens with all of our surplus tax from last year?

1)      I wouldn’t call it a surplus or unanticipated.  We intentionally forecast revenue conservatively to avoid having to make budget cuts midyear if revenue is coming in short.  For 2015, we fully expected greater revenue then we budgeted because of this conservative philosophy in our forecasting process.
2)      Of the $14M of revenue above the forecast, only about 60% of it goes to the General Fund.  Our tax rates include 2.25% for the GF, .85% for KFCG and .25% for each of three dedicated taxes that support Natural Areas, Street Maintenance and Capital projects.  The 2.25% (approximately 60% or about $9M) goes to the GF and the remainder ($5M) is spread across the 4 dedicated taxes.
3)      The revenue greater than forecast stays within each fund balance at year end and is then available to Council for use in the next budget process.  We begin the Budget for Outcomes (BFO) process for 2017/18 in April and the unassigned and available 2015 yearend fund balances (from both the GF and other dedicated funds) will be available for projects and priorities identified with that budget process.
4)      BFO is the mechanism we use to prioritize how these funds are used.  Budget proposals are brought forward by staff and all compete for the use of any available resources.

Because we have a two year budget that determines what we spend, additional revenue that comes in above what was forecasted automatically stays within the fund until Council makes a decision to spend it.  That decision generally occurs 1) during the 2 year BFO process (the two year budget process that occurs on even years) or

2) during the Mid-Year Revision process (this is a mid cycle adjustment to the 2nd year of the two year budget that occurs in the odd years).

3) There are times where a request for funding comes forward anytime during the year as a supplemental appropriation, but we work to limit budget requests out of cycle.