Monthly Financial Report for the Period Ending January 31, 2012
Presented to City Council by City Manager Rashad M. Young on March 13, 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 housing starts, permits and completions: According to U.S. Census Bureau figures, January 2012 privately-owned housing starts were adjusted to an annual rate of 699,000. This is an increase of 1.5 percent over the December rate of 689,000, and a 9.9 percent increase above the January 2011 rate of 636,000. Building permits for January were adjusted to an annual rate of 676,000, an increase of 0.7 percent above December and 19 percent over January 2011. Housing completions were adjusted to an annual rate of 530,000, a decrease of 12 percent as compared to December but 4.1 percent above the January rate, while City permits in January are still primarily for renovations.
- National Gross Domestic Product: According to the U.S. Bureau of Economic Analysis, the GDP grew 2.8 percent from the third to fourth quarter 2011. This is the largest increase since the second quarter 2010, and 1.1 percent above the 10 year average quarterly growth rate of 1.7 percent. However, it is 0.46 percent below the average quarterly growth rate (3.26) from second quarter 1947 through fourth quarter 2011. See graph below:
While there is no consensus of economists, the Economic Cycle Research Institute predicts that a new recession is inevitable, despite improvement in high-profile economic indicators, such as job creation and unemployment, and a stock market rally. They cite concerns about annual growth in industrial production, real personal income and spending, as well as the year-over-year change in gross domestic product, a broad measure of the nation's economic activity.
Year-to-Date Revenues: As of January 31, 2012, seven months into the fiscal year, actual General Fund revenues totaled $292.9 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. The FY 2013 Proposed Budget contains a revised estimate for FY 2012 revenues. That estimate shows a revenue surplus of $7.5 million or 1.3 percent compared to the original FY 2012 budget estimate of General Fund revenues of $566.9 million, primarily due to an increase in real property revenues (resulting from higher assessments than previously forecast).
- Real Property Taxes: The increase is primarily the result of the budgeted increase in the real estate tax rate for transportation.
- 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.
- Communication Taxes: The decrease is primarily attributable to a one time refund issued to a large wireless provider that 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 18 percent is a result of the variable timing of tax payments.
- Recordation Tax: The increase is primarily the result of the sale and refinancing of a few large commercial properties.
- Other Local Taxes: The decrease of 30 percent is a result of the variable timing of quarterly payments for vehicle rental taxes.
- Revenue from Federal Government: The decrease primarily represents the timing of payments for the Federal Prisoner Per Diem.
- 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 January 31, 2012, actual General Fund expenditures totaled $287.1. million, an increase of $14.4 million, or 5.3 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 6.9 percent. For many departments, differences in spending patterns reflect the timing of bill payments and not necessarily changes in spending patterns. We continue to closely monitor and control 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. Staff will continue to monitor overtime and other expenditures and revise the projections as needed.
- Debt Service: The increase reflects budgeted debt service for new bonds issued in June 2010 and July 2011. 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. Additional costs are anticipated relating to the line of duty incident.
|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):