Published: July 17, 2008 09:56 pm            

City sales tax receipts mixed

EDMOND — The Edmond Economic Development Authority reports a 3.48 percent increase of city sales tax revenue through this spring.

Edmond’s economy continues to grow in sales tax revenue, business alterations and the average value of commercial building permits in spite of bumpy national economic trends. But the long-standing increase in sales tax revenue for the city is half the growth seen two years ago.

“Yes, it is down from what we have been experiencing in recent years … but it’s not doom and gloom either,” said Larry Stevens, city manager. “A three and a half (percent) sales tax growth is still very healthy and we need to keep that in perspective.”

EEDA’s June Business Barometer actually reflects receipts tabulated for April’s annual year to date activity.

In June, the Edmond City Council approved more than $221 million for its 2008-09 budget. The city had budgeted for a 7 percent increase in sales tax receipts for the 2007-08 fiscal year as part of a five-year financial plan. But mid-year budget adjustments showed a decrease in sales tax revenue, which caused the city to modify its sales tax projections to an increase of 4.25 percent.

Further adjustments will be made to the city’s budget based on the new 3.48 percent increase in sales tax revenue, Stevens said Thursday morning.

“We are not in a budget crisis,” he said, adding that it’s too early to say what specific adjustments will be necessary.

It’s normal for sales tax revenue to be cyclical in all cities, Stevens said. And Edmond is not immune to national economic trends.

“Frankly, you can kind of make the same analogy with residential building permits because in the last two calendar years from 2005 to 2007, the number of residential permits issued by the city dropped to about 33 percent,” Stevens said.

Stevens said residential building permits dropped 14 percent during the first quarter of this year. EEDA reports residential building permits declined by 8.6 percent in the year to date Business Barometer. A total of 212 residential building permits were issued during June’s year to date activity, compared to 232 permits issued for the same 2007 period.

Fewer people are building “spec” homes due to the cost of steel, said Toni Weinmeister, EEDA associate director, although existing home sales continue to increase every year. A spec home is a home built without a contracted buyer for it. However, residential permits improved with 38 issued for the month of June compared to 19 for June 2007.

Edmond’s economy is bucking a long-standing trend. The June report indicates the number of commercial alteration permits has increased while residential permits decreased in Edmond, Weinmeister said.

The number of commercial permits and alterations issued in Edmond usually reflects the volume of residential permits issued, Weinmeister said. But alterations to business permits increased by 16.42 percent while residential building permits declined by 8.6 percent for the annual year to date.

Two new commercial building permits in the June report list an average value of $1.3 million, an increase of more than 65 percent from previous annual year to date activity.

“We pulled Arvest Bank at Kingston at $1.1 million and the Windsor Office Park at Danforth for $1.5 million,” Weinmeister said of construction permits. “Those are two very large permits, and then 25 alterations. I haven’t seen that in a long time.”

Conn’s Appliances at Edmond Plaza had a $1 million alteration and Windsor Park had an alteration for $1.5 million. And Foster’s Flowers alteration was a $60,000 investment at Spring Creek Plaza.

Owner Randy Foster said Edmond is good for his business because customers know what they want.

“When they’re coming in they’re not browsing,” he said. “They’re shopping for something they specifically need.”

TO LEARN MORE about the Edmond Economic Development Authority, 825 E. Second St., go to www.eeda.com or call its office at 340-0116.

        

• Click to discuss this story with other readers on our forums.