Monthly Financial Report for the Period Ending July 31, 2011
Presented as an informal, informational memo to City Council from Acting City Manager Bruce Johnson.
Download Original Signed Memo
NOTE: Click on the headings below or the "online references" to view more detailed economic, revenue or expenditure data. Click on any highlighted bullet or text to view additional information, including charts and memos.
Final revenues and expenditures for FY 2011 will be reported later this fall in the City’s audited Comprehensive Annual Financial Report (CAFR). We are pleased to report that through prudent fiscal management, we have produced sufficient savings not only to the planned surplus from real estate taxes but also to provide additional surplus savings that can be used for such things as future one-time capital expenses, and/or to build up our reserves for future economic downturns, disasters, or other emergencies. Staff will provide an unaudited estimate of how the City finished FY 2011 financially in the next report.
- Calendar year-to-date median sales prices for residential properties have increased 8.2 percent. This and future monthly reports will give median rather than average sales prices, since median pricing data more strongly reflect overall real estate values in the City. Average sales prices can vary wildly due to changes in the mix of properties sold from one year to the next. This does not mean that house assessments are going to rise at an 8.2 percent rate next year but is a measure of both some home appreciation, as well as the fact that the sales of higher priced homes has increased.
- Consumer prices increased faster than forecast in July. The national CPI increased 3.6 percent for the third month in a row, reflecting the largest year on year increases in consumer prices since October 2008. Food and gasoline prices accounted for more than half of the growth. The core CPI excluding food and energy increased by 1.8 percent, the largest year on year increase since December 2009. The regional consumer price index increased by 4.1 percent, the largest year on year increase since October 2008.
- Seasonally-adjusted real average hourly earnings were down again in July. Earnings for all employees fell by 0.1 percent, contributing to a 1.3 percent year on year decrease since July 2010. Real average hourly earnings for production and non-supervisory employees fell 0.2 percent for the month, contributing to a 1.7 percent year on year decrease.
- According to the Alexandria Convention and Visitors Association (ACVA), following a weak first quarter, June showed a small improvement in demand for hotel rooms, but revenues continued to suffer. June showed an increase of 3.1 percent in the number of rooms sold; however, primarily due to the drop in the federal government per diem, the average daily rate and revenue per available room both decreased, 3.0 and 2.7 percent respectively, from June 2010.
- City staff is reviewing the indirect effects of the debt ceiling/deficit-reduction agreements in Congress. Federal budget cuts are expected to directly and indirectly affect the City economy, budget and financial condition. Staff is reviewing currently available data to determine what effects can be expected and what steps can be taken to address any problems that may arise. City Council has already received an August 1 memo on the potential direct impacts on the City budget and a second memo is now being issued simultaneously with this report. Given that the structure of the federal budget cuts will not be known until November, a situation of uncertainty will exist through the fall and dampen federal contracting, federal hiring and federal government-related business travel. Hence, City tax revenues will be impacted.
Year-to-Date Revenues: As of July 31, 2011, actual General Fund revenues totaled $1.7 million, which approximates FY 2011 revenues for the same period last year. Government accounting principles require that most taxes and intergovernmental revenues received in July are counted as revenue for the fiscal year ended June 30, 2011. See the online reference for more information.
Year-to-Date Expenditures: As of July 31, 2011, actual General Fund expenditures totaled $37.0 million, an increase of $3.3 million, or 9.8 percent, above expenditures for the same period last year. One month does not provide enough data to recognize any trends either positive or negative.
There are several departmental changes approved for FY 2012. The Department of Mental Health, Mental Retardation, and Substance Abuse, the Department of Human Services, and the Office on Women have merged into one agency: the Department of Community and Human Services. The Department of Emergency Communications was established in March of FY 2011 to consolidate the emergency communications functions of the Police and Fire Departments into a single department. When possible, prior year amounts have been moved to the new departments.
- Debt Service: The increase reflects budgeted debt service for new bonds issued in June 2009 and June 2010. A portion of the interest cost ($1.2 million) is reimbursed from the federal government as part of the Build America Bonds program as noted above.
ONLINE REFERENCES (ATTACHMENTS):