Monthly Financial Report for the Period Ending March 31, 2012
Presented to City Council by City Manager Rashad M. Young on May 8, 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.
Residential real estate sales volume and median residential sales price - The calendar year to date number of units sold is down 2.4 percent from last year (205 in February 2011 to 200 in February 2012) but increased over the previous month's dwellings sold from 96 in January to 104 in February. Median sales price ($466,500) for all residential sales has increased 18.7 percent over last year while the three month trailing average ($460,500) is up 21 percent over the previous year. This increase reflects the mix of all homes being sold, not a large increase in the value of all homes sold and unsold.
Office Vacancy Rate in Alexandria, NOVA, and DC Metro Area* – From the fourth quarter 2011 to the first quarter 2012 the Alexandria Office Vacancy Rate (14.4 percent) increased 0.5 percent. Over the same period of time the vacancy rate for NOVA (13.9 percent) increased 0.6 percent and the rate for DC Metro Area (12.2 percent) increased 0.5 percent. From first quarter 2011 to first quarter 2012 the Office Vacancy Rate for Alexandria increased 2.3 percent, NOVA increased 1.0 percent, and DC Metro Area increased 0.7 percent. The Alexandria Office Vacancy Rate continues to be higher than the surrounding area; this is a trend that began in the second quarter of 2011. Additionally, since the fourth quarter of 2010 the rate in Alexandria is increasing faster than the surrounding areas.
* DC Metro Area includes: Alexandria, Arlington, Falls Church, Fairfax County, Fairfax City, Prince William County, City of Manassas, Montgomery County, Prince George's County, and the District of Columbia.
Unemployment Rate and Job loss during the recession – According to the Virginia Employment Commission, revised seasonally adjusted data shows that Virginia lost approximately 186,100 jobs during the recession and has regained approximately 116,500 or 63.0 percent. Thus far in 2012 Virginia has added roughly 37,400 jobs. The Alexandria Unemployment Rate (5.0 percent) remains below that of the state (5.7 percent).
The Unemployment Rate in Alexandria increased to 5.0 percent in January and remained there through February. This is the highest rate of unemployment since March 2010, when unemployment was 5.3 percent, and is off the recession peak realized in February 2010 by 0.4 percent. Prince William County has a higher rate at 5.1 percent. Arlington is at 3.9 percent while Fairfax and Loudoun are both at 4.3 percent.
Year-to-Date Revenues: As of March 31, 2012, nine months into the fiscal year, actual General Fund revenues totaled $345.0 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 which are up 5.0 percent and 8.0 percent respectively over the last year. The FY 2013 Proposed Budget contains a revised estimate for FY 2012 revenues. That estimate shows a projected 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 the increase in real property revenues (resulting from higher assessments than previously forecast). Additional changes in revenue were provided to City Council as Budget Memo #48 and reflect about $1.7 million in revenue increases for FY 2012. As discussed in the memo, the impact of these projections is a $1.2 million revenue increase in the FY 2013 revenue projections and a $0.6 million increase in state funding. These increases are offset by an increase in expenditure projections of $1.0 million, for a net increase of $0.9 million for FY 2013. All FY 2012 projections will be included in the April report; the major changes are discussed below.
- 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 already been included in the estimates for FY 2013 budget revenues. Based on current collections, staff projects FY 2012 revenue to be at least $37.2 million, an increase of $0.3 million over the previous projection.
- Communication Taxes: The decrease in these taxes 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 City’s business license tax is due March 1, 2012. As discussed with City Council, some collections show increases over FY 2011. Based on these collections, staff projects that collections will be at $32.6 million, an increase of $0.6 million above the previous projection.
- Recordation Tax: The increase in this tax is primarily the result of the sale and refinancing of a few large commercial properties. Based on current collections, primarily for residential refinancings, staff projects collections will be approximately $4.8 million, an increase of $0.7 million above the previous projection.
- Revenue from Federal Government: The decrease in Federal revenue primarily represents the timing of payments for the Federal Prisoner Per Diem.
- Revenue from Commonwealth: The increase represents the timing of payments for compensation reimbursement from the state for constitutional positions.
- Other Local Taxes: The decrease of 32 percent in other local taxes is a result of the variable timing of quarterly payments.
- Charges for Service: The increase in charges for services is the result of a budgeted increase in meter fees (to $1.75/hour) implemented with the installation of the new multi-space meters midway through FY 2011. In addition, planning permit fees also show increased activity for FY 2012. Based on collections to date, staff projects charges for services will be at least $15.6 million, an increase of $0.6 million over the previous projections.
Year-to-Date Expenditures: As of March 31, 2012, actual General Fund expenditures totaled $365.2 million, an increase of $17.0 million, or 4.9 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 higher than last year by 2.1 percent but match the percent of payrolls completed, which is 75 percent. Non-personnel spending increased 6.7 percent, but is only 57 percent of the budget so far. For many departments, differences in spending patterns 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.
- Transportation and Environmental Services: Increased expenditures are primarily related to increased fuel costs and the ability to complete some paving and patching projects earlier in the fiscal year. Staff will monitor these activities and revise the projections as needed.
- Health: Increased expenditures reflect a timing difference in payments made to the Commonwealth of Virginia for contract health services.
- Community and Human Services: Increased expenditures are the result of a significant increase in Comprehensive Services Act costs in the 3rd quarter, due to an increase in caseload.
- 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 $2.34 million to $3.55 million in damages to the Holmes Run sewer that are believed to have resulted from the storm. City Council committed fund balances to offset any costs not reimbursed by FEMA. Initial reviews of the projects indicate that sanitary sewer work is not eligible for reimbursement since the projects currently being considered would move these sewer lines from their pre-disaster location.
Additional costs are included in the General Fund expenditures relating to the February line of duty death incident, which resulted in the death of Alexandria Paramedic Joshua Weismann.
|Tropical Storm Lee
||$2.34 - $3.55 million
||Declaration could reduce some costs.
||Declaration could reduce to between $0.3 and $0.4 million.
|9/11 Terrorist Preparation
|February Line of Duty Death Incident, Funeral,
and Associated Costs (Fire paramedic)
||City expenses included in the General Fund.
Lastly, there are savings in the Non-Departmental budget due to decreased need for snow removal activities. However, these savings will help cover only a portion of the emergencies shown above, for which we are not going to be reimbursed.
- Schools: The City will provide approximately 75 percent of the estimated funds required to operate the City public school system in FY 2012.
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