Monthly Financial Report for the Period Ending December 31, 2011
Presented to City Council by City Manager Rashad M. Young on February 14, 2012.
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.
- National unemployment claims fall to near four year low. According to the U.S Labor Department, national unemployment claims have dropped to 352,000 for the week ending January 14, a decrease of 50,000 from the previous week’s report. This is the lowest level since April 2008 and the largest single drop since September 2005. Unemployment claims have held below 400,000 for 10 straight weeks. The National unemployment rate declined 0.1 percent to 8.5 percent, while Virginia and Alexandria both dropped 0.2 percent to 6.2 and 4.3 percent respectively. It is important to monitor both trends as a decline in unemployment claims doesn’t always result in a decrease in unemployment rates (See graph below).
- Housing market showing some mixed signs. One positive note locally is that the annual value of new multi-family construction permits for FY 2012 is $102 million, which is roughly $12 million less than the past three fiscal years combined ($114 million total for FY 09, 10, and 11). A large portion of the multi-family production ($57 million) is from projects near the Braddock Rd. Metro. Additionally, the year-to-date number of single family permits (44) is outpacing the previous three fiscal years of 27 in FY 11, 13 in FY 10, and 25 in FY 09. Both of these trends are reflected in the national data, which showed increases in new housing starts, particularly in multi-family, through November. Additionally, the number of local foreclosures is down 48 percent from this time last year. On another positive note, recent national forecasts from Merrill Lynch, Fannie Mae, Wells Fargo, and the National Association of Home Builders for CY 2012 predict “bullish” growth in new home sales and single family starts.
Year-to-Date Revenues: As of December 31, 2011, six months into the fiscal year, actual General Fund revenues totaled $281.0 million, which is four percent higher than FY 2011 for the same period. Most of this increase is related to real estate and personal property taxes.
- Personal Property Taxes/Motor Vehicle License: The FY 2012 vehicle assessments included 5,000 more cars than the FY 2011 billing. The resulting increase in revenue of approximately $1.0 million has been included in the estimates for FY 2013 budget revenues.
- Real Property Taxes: The increase is primarily the result of the budgeted increase in the real estate tax rate for transportation.
- Recordation Tax: The increase is primarily the result of the sale and refinancing of a few large commercial properties.
- Federal Government: The decrease primarily represents the timing of payments for the Federal Prisoner Per Diem.
- Communication Taxes: The decrease is primarily attributable to a one time refund issued to a large wireless provider who collected taxes on data services for various wireless devices used by their customers. The total amount of the refund including interest was $12.9 million, and the City’s share was $0.3 million.
- Business License Taxes: The decrease of 37 percent is a result of the variable timing of tax payments.
- Other Local Taxes: The decrease of 46 percent is a result of the variable timing of quarterly payments for vehicle rental taxes.
- Charges for Service: The increase is the result of a budgeted increase in meter fees (to $1.75/hour) implemented with the installation of the new multi-space meters mid-year in FY 2011.
Year-to-Date Expenditures: As of December 31, 2011, actual General Fund expenditures totaled $235.0 million, an increase of $5.8 million, or 2.5 percent, above expenditures for the same period last year. The revised budget reflects amounts that were appropriated in the supplemental appropriation ordinance approved in November. Personnel expenditures remain on par with last year. These personnel expenditures are just slightly higher than the budget, primarily because turnover savings are deducted from the budget on the first day of the fiscal year while the savings are realized during the year. Non-personnel spending increased 2.6 percent. For most departments, differences in spending patterns for non-personnel this early in the year reflect the timing of bill payments and not necessarily changes in spending patterns. We are, and will continue to be, closely monitoring and controlling these expenditures to be at or below budget.
- Fire Department: As discussed during several City Council Legislative meetings and during the FY 2012 budget process, the Fire Department has a continuing need to utilize overtime to maintain minimum staffing levels on frontline Fire and EMS units when firefighters and medics use leave and to fill vacancies from attrition. The new Fire recruit class hired in 2011 has started to reduce costs from the prior year. Another recruit class is now underway that will continue to reduce the need for overtime late in FY 2012. Even with these changes, the Fire Department is currently projected to be over the current FY 2012 budget as adopted by City Council. OMB and Fire staff will continue to monitor overtime and other expenditures and revise the projections as needed.
- Health: The decrease reflects the timing of bills received from the Commonwealth for services provided.
- 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.
- Non- Departmental: General Fund expenditures do not include the costs for several emergencies shown in the following table. The City has been included in the Presidential declarations for Hurricane Irene and Tropical Storm Lee, which makes certain expenditures eligible for federal reimbursement. Staff continues to work with FEMA and insurance adjustors on the reimbursement requests, though no reimbursements have been received yet. The Tropical Storm Lee cost estimate includes $2.79 million to $3.36 million in damages to the Holmes Run sewer that are believed to have resulted from the storm. City Council committed funds to offset any costs not reimbursed by FEMA.
|Tropical Storm Lee
||$2.68 - $3.55million
||Declaration could reduce some costs.
||Declaration could reduce to between $0.3 and $0.4 million.
|9/11 Terrorist Preparation
- Schools: The City will provide approximately 75 percent of the estimated funds required to operate the City public school system in FY 2012.
ONLINE REFERENCES (ATTACHMENTS):