REVENUE SOURCES AND TRENDS GENERAL FUND

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1 REVENUE SOURCES AND TRENDS GENERAL FUND As a matter of general policy, revenue estimates during the 1990s were budgeted conservatively to promote contributions to fund balance and avoid revenue shortfalls due to unexpected weakness in the local economy or a slow-down in the rate of construction activity. A substantial shift to more realistic budgeting of revenues began in FY 1999, and this approach has continued since then. FY budgeted revenues for the general fund are projected to increase 2.4% over estimated FY revenues, while FY estimated revenues are projected to decrease 1.2% from actual FY revenues. The general fund s major revenue source, the property tax, has continued to grow. However, the growth rate has slowed from double-digits in the 1990s to 1.8% for FY. The tax rate was reduced from 54 cents to 43 cents in FY as a result of property revaluation in Wake County. The tax rate was further reduced to 42 cents in FY and remained steady until it was reduced to 33 cents in FY, again as a result of property revaluation which is conducted at least every eight years as dictated by state statute. The FY tax rate will remain the same at 33 cents. FY permit and fee revenue estimates reflect a 1.9% increase from FY. Population growth, which averaged 9.6% per year from FY 1994 through FY 1998, trended downward in the early s, and is estimated to be 1.85% in FY. Revenues have been estimated by analyzing the major drivers that affect each revenue source, how the economy affects those drivers, and the timing of when revenue is received. Actions taken by the North Carolina General Assembly in the past have had a lasting impact on Cary and other North Carolina local governments. During the 1993 session, the Legislature changed the beer and wine and utility franchise taxes to an automatic distribution with growth, effective in FY In 1998, the General Assembly removed the natural gas portion of the utilities franchise tax and imposed a natural gas excise tax based on consumption. In April 1995, the General Assembly repealed the state's intangibles tax on stocks, bonds, and bank deposits, a portion of which was allocated to local governments. The state reimbursed local governments for this lost revenue based on the prior year s allocation level, with no growth factor, until the reimbursements were repealed effective July. These reimbursements were replaced with a new one-half cent sales tax (Article 44) beginning in December. Fiscal problems at the state level directly affected local reimbursements during FY. The state retained the spring FY inventory tax reimbursement to help address state budget shortfalls. These funds were later released by the Governor in June. In May, the state announced that it would also retain Emergency 911 revenues, and again the Governor released the funds in June. While these actions ultimately had no impact on Cary in FY, financial constraints at the state level led to other withholdings during FY. The Town s FY revenues were reduced by $2.35 million when the Governor withheld wine and beer taxes, as well as a portion of utility franchise taxes and inventory tax reimbursements, to help balance the state budget. In addition to fiscal problems at the state level, overall fluctuations in the health of the economy have impacted the Town s revenue growth as well. With the recession that began in, building permit activity, investment income, and sales taxes have been directly impacted. These three revenue sources combined totaled $34.9 million in FY versus only $22.8 million expected in FY, a decline of $12.1 million or 35%. Descriptions of major revenue sources and their related trends follow. Graphs showing prior years of actual data, FY estimated revenues, and FY budgeted revenues appear for each revenue category.

2 Ad Valorem Taxes = $69,985,848 Amount $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 This includes the current year Ad Valorem Taxes and the Prior Year Property Taxes, and Penalties & Interest. Ad Valorem Taxes Revenue Detail: Current Year Ad Valorem Taxes = $69,720,848 The Town of Cary property (ad valorem) tax rate for FY is 33 cents per $100 of the property s value which is estimated to total $21.4 billion. The ad valorem tax on property is the Town s major revenue source, representing 57% of all general fund revenues. Property categories assessed include real property (land, buildings, and improvements), personal property (business machinery and equipment, unlicensed vehicles like boats, etc.), vehicles, and public service (railroads and energy providers). In accordance with North Carolina General Statute 160A-209, the Town levies property (ad valorem) taxes on July 1, the beginning of the Town s fiscal year, for property in place as of January 1 of that same calendar year. Property taxes are assessed and collected by Wake and Chatham counties and remitted to the Town throughout the year. These taxes are separate from those levied by Wake and Chatham Counties. The taxes are due on September 1, but interest does not accrue until the following January 6. The Wake and Chatham County Revenue Departments are also responsible for billing and collecting taxes on registered vehicles in the Town of Cary. For motor vehicles registered under the staggered system, taxes are due the first day of the fourth month after the vehicles are registered. The billed taxes are applicable to the fiscal year in which they become due. The FY budget includes a 2% projected increase over the FY revenue estimate for this category. Prior Year Property Taxes: = $200,000 This revenue consists of late property tax payments from previous fiscal years received in the current fiscal year. FY is budgeted to be the same as the FY estimated revenue. Penalties & Interest = $65,000 This revenue comes from the fines and interest applied to overdue property taxes. FY is budgeted to be the same as the FY estimated revenue.

3 Other Taxes & Licenses = $25,840,068 Amount $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 The major revenue source within this category is Sales Tax, budgeted in FY at $10.5 million for the one-cent tax and $12.3 million for the three half-cent taxes. As the graph indicates, this revenue source has been impacted by both the and recessions. Other Taxes and Licenses also includes ABC revenue, privilege licenses, occupancy tax, and pet licenses. Other Taxes & Licenses Revenue Detail: ABC Revenue = $540,086 Pursuant to North Carolina General Statute 18B, ABC taxes are distributed quarterly by the county alcohol control board based on the ad valorem levy from the previous year after expenses are deducted for law enforcement, education, and rehabilitation according to North Carolina General Statute 10A- 15(14). The FY budget is projected to increase 3.6% over the estimated FY revenues. One-Cent Sales Tax (Article 39) = $10,512,473 Wake and Chatham counties levy a one-cent local sales tax on all retail sales, lease, or rental of tangible personal property, rental of motel or hotel rooms, and rendering of services according to Article 39 of North Carolina General Statute 105. Proceeds of the one-cent sales tax are distributed to municipalities in each respective county by a formula based on county point of sale. Once the county share is determined, municipalities and the county itself receive funding based on population within the respective county as recorded by the North Carolina Office of State Planning. Sales tax receipts are received monthly with the fourth quarter of each calendar year traditionally being the highest and first quarter being the lowest. The one cent sales tax revenues dipped in FY to $7.8 million in association with the declining economy, experienced a strong recovery through FY and since then have been experiencing declines due to the recession. A decrease of $2.3M or 9.6% is expected in FY, with growth of $1.2 million or 6% anticipated in FY generating approximately $22.7 million, which is still $1.4 million or 5.9% less than the peak year of FY. Half-Cent Sales Taxes (Articles 40 and 42) = $9,323,630 The North Carolina General Assembly authorized the half-cent sales tax as a local county option. Two half-cent sales taxes exist and both are currently collected statewide and then distributed to counties on a per capita basis according to Articles 40 and 42 North Carolina General Statutes 105. As of October 1,, the Article 42 local option sales tax will be distributed to municipalities based on county point of sale. Wake and Chatham County totals are then distributed to the municipalities therein and the county itself based on population as recorded by the North Carolina Office of State Planning. Prior to FY, 70% of the total was budgeted in the general capital reserve and 30% in the utility capital reserve. In FY the Local Government Commission began requiring all sales tax revenue to be budgeted in the general fund as unrestricted revenue. FY revenue is estimated to decrease by 11.3% from FY however; FY budget revenues represent an 8.8% increase over FY. Sales tax receipts are received monthly with the fourth and first quarters of each calendar year being the highest and lowest, respectively.

4 Half-Cent Sales Tax (Article 44) = $2,956,273 The North Carolina General Assembly, as a local county option, authorized this half-cent sales tax with proceeds going to counties and municipalities. Both Wake and Chatham counties approved this new half-cent sales tax which took effect in December as a replacement for the repealed intangibles tax and inventory tax reimbursements, which were both repealed effective July 1,. This tax is different from the other sales taxes because it is not charged on food, and its distribution method is 50% on point of sale and 50% on per capita. In, the state passed legislation to have the state assume county Medicaid costs, thus eliminating the Article 44 local option sales tax. Effective October 1,, the state took over one quarter cent of the Article 44 sales tax as authorized by North Carolina General Statute 105, and effective October 1,, the state will take over the remaining one-quarter cent. The legislation provides for municipalities to be completely reimbursed for the loss of their share of tax revenues, accounting for growth. The first onequarter cent will be replaced by a payment equal to 50% of the amount the Town receives from the Article 40 sales tax, and the second one-quarter cent will be replaced by a payment equal to 25% of the Town s share of the Article 39 sales tax. These payments will come from Wake and Chatham Counties share of sales tax revenues, but will be paid directly to the Town by the NC Department of Revenue. FY is budgeted at a decrease of 1.6% from the FY estimated receipts. Privilege Licenses = $1,586,906 The Town levies local taxes on the businesses, trades, and professions operating within its corporate limits. The fee schedule is based on gross receipts and the nature of the business. Actual annual revenues can fluctuate considerably depending on whether fees are collected in June (the end of the fiscal year) or July (the beginning of the next fiscal year). This revenue source is not accrued from one year to the next, so the revenue shown is for privilege licenses paid as of June 30th. New privilege license requests have been slightly more numerous recently following several years of no growth, but the revenue growth recognized in FY was a result of the new rate structure implemented as part of the FY budget process that impacted revenues collected at the end of FY and there after. Thus, FY actually experienced a 43.6% increase in revenues. During the economic downturn revenue decreased 9.1% in FY and 2.2% in FY. In FY privilege license revenue is projected to increase by 1% over FY, however due to the overall downward trend of the last three fiscal years this revenue is projected to decrease 1.6% in FY. Occupancy Tax = $830,000 Occupancy Tax in Wake County Wake County is authorized to levy an occupancy tax according to North Carolina General Statute 160A. Prior to 1991, the Town levied a separate occupancy tax. However, in 1991, the General Assembly amended the statute, repealing municipal authority to levy an occupancy tax in Wake County. In exchange for Cary s loss of its taxing authority, the amendment provided for a share in Wake County s occupancy tax revenues. The occupancy tax is 6% of the net receipts reported for all hotel and motel rooms in Wake County. Because Cary receives a flat 5% of the total occupancy tax revenues collected in the County, there is very little correlation between hotel/motel activity in Cary and the revenue the Town receives. Historical figures indicate Cary businesses generate approximately 20% of all occupancy taxes collected within Wake County. FY is estimated at an increase of 9.3% over FY, and FY is budgeted at an increase of 4.8% over FY estimated receipts. Occupancy Tax in Chatham County Senate Bill 1679, Chapter 642 was ratified by the North Carolina General Assembly with an effective date of July 1,. This legislation grants Chatham County the authority to levy an occupancy tax of up to 3% of the gross receipts derived from the rental of any room, lodging or similar accommodations within Chatham County. The 3% rate is in effect for FY. However, Chatham County s legislation does not state that occupancy tax revenue generated in the county must be shared with its municipalities. Therefore, the Town of Cary receives no occupancy tax funding from Chatham County.

5 Pet Licenses = $5,341 The Town collects a one-time license fee from pet owners for every dog and cat tag issued in accordance with North Carolina General Statute 160A-212. The current license fees are $50 for nonneutered pets and $10 for neutered pets. In FY, the Town experienced a large growth in pet tags issued based on the requirement that owners show proof of registration before being allowed access to the Town s new dog park, which opened in January of. However, FY is estimated to decrease 11% from FY and yet another decrease of 12.7% is expected in FY. Rental Vehicle Tax = $85,269 Session Law -2 was signed into law on May 17, and is entitled An Act to Repeal the Property Tax on Certain Vehicles Leased or Rented under Retail Short-Term Leases or Rentals and to Replace the Tax Revenue with a Local Tax on Gross Receipts Derived from Retail Short-Term Leases or Rentals. As a result of this law, the new gross receipts tax was put into place, and the Town of Cary recognized revenue beginning in December. FY is budgeted at a slight increase of 6.6% over actual FY revenues. Intergovernmental Revenues: $7,060,155 Amount $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 The major revenue sources in this category are the utilities franchise tax and wireless communications sales tax, which are budgeted at a combined $6,119,548 in FY. The drop in FY is due to the Governor withholding $2.4M to help balance the state budget. FY includes disaster reimbursement for the ice storm in December and Hurricane Isabelle. Intergovernmental Revenues Detail: Utilities Franchise Tax = $4,437,454 The State of North Carolina levies this tax on utility company gross receipts at a rate of 3.22% according to Article 3 of North Carolina General Statute 105. The state shares a portion of these taxes (3.09% of gross receipts of electric, gas, telephone, and street transportation companies) with local governments. Utilities franchise taxes are received quarterly with the highest receipts received in the fourth quarter of the fiscal year. Governor Easley withheld a portion ($1.7 million) of this revenue in FY to help balance the state budget. The FY budget is projected at a 3.4% increase over the estimated FY revenues. Wine and Beer Tax = $607,585 The State of North Carolina levies this tax on alcoholic beverages, and a municipality may share in the revenues if beer or wine is sold legally within its jurisdiction according to North Carolina General Statute The statute provides that the state shares 23.75% of state beer tax collections, 62% of state unfortified wine tax collections and 22% of state fortified wine tax collections with local government units. The proceeds are distributed within 60 days of March 31, and local portions are based on the Town s population as recorded by the North Carolina Office of State Planning. Governor Easley

6 withheld $400,000 of this revenue in FY and another $395,000 was withheld by Governor Perdue in FY to help balance state budgets. FY is budgeted at an increase of 4% over estimated FY revenues. Wireless Communications Sales Tax = $1,682,094 Prior to FY, this revenue was budgeted with the utility franchise tax. This revenue represents the Town s share of the state gross receipts tax on wireless telecommunications providers, and like the utilities franchise tax, revenue is received quarterly. The FY budget is projected to decrease by 1.5% from the estimated FY revenues. COPS Grant = Funding for the Community Oriented Policing Services (COPS) Universal Hiring Program (UHP) dropped sharply as the nation increased its focus on homeland defense funding. As a result, Cary has not been awarded any new COPS UHP funding since FY. As of FY, the Town no longer receives any funding from the COPS UHP program. In FY, Cary received a separate COPS grant totaling $338,513 for the purchase of in-car video systems for police cruisers and related system improvements. This grant provided one-time funding, and no new funding is expected in FY. High School Resource Officer Reimbursement = $151,352 This state revenue is a fixed reimbursement ($37,838 per officer) for the provision of one police officer in each of the four public high schools in Cary (Cary, Green Hope, Middle Creek and Panther Creek). Permits and Fees: $2,870,633 $7,000,000 Amount $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Fees for new building permits are the major revenue source for this category, budgeted at $1.9 million in FY. This category also includes various permits and fees detailed below. The revenues in the Permits and Fees category depend heavily upon the level of new construction activity. Permits and Fees Revenue Detail: Building Permits = $1,866,351 The Town charges these fees for providing construction permits, plan reviews, and inspection services to applicants in accordance with North Carolina General Statute 160A-414. Applicants must pay the fees at the time of permit issuance. FY revenues are budgeted at a 5.6% decrease from the estimated FY revenues. Furthermore, FY revenues are estimated at a 5.7% decrease from FY. For single family residential construction, fees are based on the square footage of the residence.

7 Pavement/Curb Cuts = $13,500 Pursuant to North Carolina General Statute 160A-414, the Town charges this fee for permission to cut and repair a curb. This revenue fluctuates with the rate of new construction. FY is budgeted to be at a 7% increase over the FY estimated revenue. Rezoning/Variance Fees = $14,600 These are charges the Town collects to cover the administrative and advertising costs of public hearings for a rezoning or variance. FY is budgeted at a slight increase of 1.9% over the FY estimated revenue. Site Plan/Final Review Charge = $105,191 The Town collects a fee from individuals to cover the costs of filing and reviewing site plans and for the final review of all subdivisions as authorized by North Carolina General Statute 160A-414. FY is budgeted at an increase of 5% over the estimated revenue amount in FY as this revenue varies according to whether economic conditions are favorable or detrimental to subdivision development. Inspection Fees = $239,825 These fees include commercial site inspections, street sign inspections, extra inspections, and reinspection fees. Applicants pay commercial site inspection fees of $515 per developed acre when a site plan approval is granted. Re-inspection fees are charged when an inspector is called back out to a site, and an additional fee is charged for inspections conducted at night or on weekends. FY is budgeted at an increase of 3.4% over the FY estimated revenue. Sign Permits = $22,979 These fees are charged for the placement of temporary and permanent signs. FY is budgeted at an increase of 2% over the FY estimated revenue. Traffic Impact Analysis Reimbursement = $270,000 Developers must pay this fee before site plans are submitted for analysis of traffic impacts from the development. The Town charges developers 90% of the cost and the Town pays for the remaining 10%. The Town also pays for traffic studies related to park and capital projects. The average cost of a study is approximately $10,000. FY revenue is projected to increase 93.3% from FY estimated revenues. Grading Permits = $76,576 Per North Carolina General Statute 160A-414, the Town charges these fees to developers (commercial and residential) based on the amount of acreage denuded by the development. These fees were changed in FY 1999 from a flat charge to a rate of $165 per denuded acre. Effective in FY the fee was increased to $500 per denuded acre. FY is budgeted to be the same as FY estimated revenue. Watershed Maintenance Fees = $200,923 The Town collects a fee of 15% of the actual cost of a water quality structure from the developer when the development project is completed pursuant to North Carolina General Statute 160A-414 and in accordance with the Watershed/Water Supply Act of This is a state requirement to ensure that the water quality device will be maintained. FY is budgeted at a 5% increase over FY estimated revenues. Fire Permits = $45,688 In accordance with North Carolina General Statute 160A-414, the Town grants special permits for the possession or storage of hazardous/flammable materials. The state fire code requires these fees be charged for additional inspections. FY is budgeted at a 5% increase over FY estimated revenues.

8 Charges for Sales and Service: $12,412,803 Amount $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 The major revenue source for this category is the solid waste and recycling fee, which is budgeted at $6,934,707 for FY. The dip in FY revenue was created when the fee was lowered from $11.50 to $7.67 per month prior to it being increased to $11.50 starting in FY. The fee has been stable since it was increased to $14.00 per month in FY. Other charges included in this category are used appliance fees and all recreation related fees. Charges for Sales and Service Revenue Detail: Sanitation Fees = $6,934,707 Beginning in the fall of FY, the Town began the process of switching from backyard solid waste collection to a more efficient curbside collection process. The Town now provides residential customers with once a week curbside collection service for solid waste and once every two weeks curbside collection service for recycling. In FY, this fee was reduced from $11.50 per month to $7.67 per month, where it remained through FY. In FY the monthly fee was increased to $11.75, which represented approximately 75% cost recovery. The fee was increased in FY to $ The FY budget reflects a 1.9% increase over estimated FY revenues, while FY is estimated at a 1.9% increase over FY actual collections. The historical level of this monthly fee is presented in the graph below. Monthly Rate $16 $15 $14 $13 $12 $11 $10 $9 $8 $7 Town of Cary Solid Waste and Recycling Fee History FY93 - FY13 $ In 1994, service was changed from twice a week back yard collection to once a week. In, the process of converting to curbside automation and dual stream recycling began with full implementation in effect beginning in FY. Used Appliance Disposal Fees = $23,903 These fees are collected from residents who request that the Public Works and Utilities Department transport a used appliance to the county landfill. The FY revenue is budgeted at a 4.3% decrease from the estimated FY revenues.

9 Recreation Program Fees = $955,251 These fees are collected from participants in Town recreation activities such as classes, camps, workshops, trips, events, and ropes course programs held at community centers, the senior center, the Stevens Nature Center and Bond Park. FY revenue is projected at a slight increase of 1% over the FY expected revenues. Athletic Fees = $904,552 These fees are collected from participants in youth and adult sports programs such as softball, volleyball, basketball leagues and short duration camps and clinics. FY is budgeted to be the same as the FY estimated revenue. However FY revenue is estimated at an 11.1% increase over FY. All adult programs recover direct costs such as instructor costs and supplies. Youth programs are largely subsidized by the Town. Tennis = $1,242,000 During FY the Town of Cary took over the operations of the tennis park. New York Tennis had previously operated the facility under a contract arrangement and paid the Town $2,000 a month for lights. However, due to performance issues which hinged upon NY Tennis lack of profitability, the Town assumed full operational responsibility in February,. The revenue budget for FY is expected to increase 3.7% over estimated FY revenue. This increase is due to increased lessons and tournament play. Wake Med Soccer Park = $487,500 The Town of Cary took over operations and maintenance of the Wake Med Soccer Park in August. During FY the Town entered into a contract with Triangle Professional Soccer who acquired a professional men s soccer team, the Carolina Railhawks. The budgeted revenue amount is a total of various types of revenues collected including concession sales, program fees, ticket sales, sponsorships, and rental and events. FY is budgeted to be the same as the FY estimated revenue which is expected to decrease 10.4% compared to FY actual revenue. USA Baseball = $433,700 The USA Baseball complex officially opened in June. The revenue consists of concessions, program fees, sponsorships, and rentals and events. The FY budget reflects a 0.6% increase over FY estimated revenues. Skate Park = $160,000 The Town of Cary began operating the Skate Park in FY. The revenue consists of pro shop sales, concessions, program fees, memberships, and sponsorships. FY is budgeted to increase 6.7% over FY estimated revenues. Cary Arts Center = $518,691 Town of Cary renovations to the old Cary Elementary building in downtown Cary were completed in the summer of. The arts and craft programs previously held at Jordan Hall were moved to the new Cary Arts Center. The majority of arts and craft programs, theatre programs, recreation facility rentals, etc. will be held at this new Cary Arts Center facility. FY is budgeted to increase 6.2% over FY estimated revenues. Arts and Crafts = $48,749 These fees are charged to participants in Town-sponsored arts and crafts activities. The majority of this revenue is being moved to the Cary Arts Center special facility since that is where most of these programs will be held. FY is budgeted to be the same as the FY estimated revenue. Festivals = $148,145 The Town of Cary assumed all accounting responsibility for the Lazy Daze and Spring Daze festivals effective June. FY is budgeted to increase 0.5% over FY estimated revenues. Rents-Recreational Facilities = $299,090 These fees are collected for rental of Town recreational facilities. FY is budgeted to increase 0.4% over FY estimated revenues which are estimated to increase 10.4% over FY revenue. Cultural Arts Rentals = $34,583

10 Fees are collected for the rental of the Page-Walker Arts & History Center for meetings, events and private parties. FY is budgeted to increase 2.6% over FY estimated revenues. Rents-Fire = $133,352 These are fees collected for bulk water equipment rental. FY is budgeted to increase 5% over FY estimated revenues which are estimated to increase 19.2% over FY revenue Other Minor Revenues Recreation Retail Sales = $32,247 - monies from the sale of articles by the Parks, Recreation & Cultural Resources Department. Dog Park = $36,333 day or annual passes for using the facility which opened January. Hazardous Waste Reimbursement = $20,000 - the cost to clean up hazardous waste spills which are then billed to the offender. $6,000,000 Investment Earnings = $ 370,880 $5,000,000 $4,000,000 Amount $3,000,000 $2,000,000 $1,000,000 Investment earnings are the interest earned on the portion of the Town's pooled cash and investments attributable to the general fund in accordance with North Carolina General Statute Earning levels are a function of market interest rates, the amount available for investment, and the choice of investments. Eligible types of investments are established by state law, and are further limited by the Town's investment policy. The Town's investment portfolio primarily includes fixed income high quality federal government debt instruments. Lower interest rates during the economic slowdown are the primary reason for the declines in investment earnings in recent years. FY investment earnings are expected to decline compared to FY estimates as higher yielding investments in the existing investment portfolio mature and are reinvested at historically low yields.

11 Amount $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Miscellaneous = $3,772,801 Actual revenues were much higher than normal in FY due to a $1.1M one-time reimbursement received from Wake County for previously incurred project costs paid for with general fund revenue. Starting in FY, employee dental premiums of $160K were moved from the general fund to the health and dental fund. The major FY revenues in this category are video programming sales tax of $971,396, cellular tower lease proceeds of $813,601, and NCDOT traffic signal reimbursement of $695,641. The miscellaneous category also includes court costs, soil erosion fines, donations and other miscellaneous revenues. Miscellaneous Revenues = $350,000 These are revenues that do not fit into any other revenue category such as bank charges, returned check charges, fingerprinting fees and sale of Town maps. FY revenue is budgeted to be the same as the FY estimate. Video Programming Sales Tax and PEG Channel Distribution = $1,003,916 The NC General Assembly approved a change related to this revenue source via its approval of House Bill 2047 regarding video franchising during the short legislative session which became effective January 1,. This bill makes the state the franchising authority for video services and preempts local government franchising authority. Under this arrangement, franchise fee revenue is made up through state distribution of local shares of sales tax collections on telecommunications, cable, and satellite television services and includes video programming sales tax and PEG channel distribution. From January 1, through the end of FY the Town of Cary also received a small cable TV franchise fee from the local cable company for items in the Town s pre-existing franchise agreement that were not covered by the state law that took effect. Sixty-percent of the video programming sales tax revenue goes to the general fund and forty-percent goes to the general capital reserve fund, while the full PEG channel distribution goes to the general fund. For both video programming sales tax of $971,396 and PEG channel distribution in the amount of $32,520, FY revenue is budgeted to increase 2% over estimated FY revenues. Court Costs = $28,964 This revenue includes payments to the Town for civil or criminal penalties according to Article 28 of North Carolina General Statute 7A. FY is budgeted to decrease 1.9% from the estimated FY revenues. Recycled Goods = $180,000 This revenue results from the sale of recycled goods, (newspapers, glass, plastic bottles, etc.) that have been collected by the Town of Cary. This revenue source fluctuates substantially from year to year primarily based on the market price for the recyclables. The FY revenue is budgeted to decrease 37.1% from estimated FY revenues. The FY budgeted revenue for recycled materials totals $180,000 based on 10,000 tons at an average of $18 per ton for the year.

12 NCDOT/Amtrak Depot Lease = $61,472 The State Division of Motor Vehicles originally leased the Cary Depot building (which the Town of Cary owns) to operate a Licensing Examiner s facility. The State Division of Motor of Vehicles relocated in FY. The Cary Depot was expanded and renovated by NCDOT in the fall of and is currently leased to Amtrak. Cellular Tower Lease Proceeds = $813,601 These funds are from lease payments made by cellular telephone service providers to the Town for the lease of property on which cellular towers are built. There are currently eight different locations throughout Town where cell equipment space is being leased by six different providers. Donations/Contributions = $139,250 Donations are budgeted if there is an anticipated ongoing commitment. Equal expenditures are budgeted as well but are only approved to be spent at the level of donation. FY donations are budgeted for the following programs: Trees for Cary, Parks Scholarships, Memorial Donations, Parks Sponsorships, and At Risk Youth Camp.