Monthly Financial Report for the Period Ending June 30, 2012
Presented to City Council by City Manager Rashad M. Young on an informational basis only.
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This report includes highlights of the City’s financial condition and provides fiscal year (FY) 2012 financial information on revenues and expenditures of the General Fund for the period ending June 30, 2012. Final revenues and expenditures for FY 2012 will be reported later this year in the City’s audited Comprehensive Annual Financial Report (CAFR). The CAFR will reflect additional revenues received and FY 2012 disbursements made through the end of summer that are attributable to FY 2012.
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.
Office Vacancy Rate: The Alexandria City office vacancy rate decreased 0.4 percent from the first quarter of 2012 to the second quarter of 2012, its first decrease since the second quarter of 2010. Alexandria’s office vacancy rate through the second quarter of 2012 (14.4 percent) is 0.2 percent higher than NOVA (14.2 percent) and 2.1 percent higher than the DC Metro Area (12.3 percent). For year over year change Alexandria increased 2.1 percent from the second quarter of 2011 to the second quarter of 2012 (12.3 percent to 14.4 percent) while the change over the same time period for NOVA was 1.3 percent (12.9 percent to 14.2 percent) and DC Metro Area increased 0.9 percent (11.4 percent to 12.3 percent).
Accounting for a portion of the increased office vacancy rate in Alexandria is the closure of several offices since late 2005 when the Base Realignment and Closures (BRAC) recommendation were adopted. Several office buildings that were occupied by the Department of Defense, and related entities, have now emptied. Retail space is not easily tracked but current estimates from AEDP retail vacancy in Old Town are just below 4 percent. Other areas are unknown at this time.
Hotel Occupancy Rates: Through April of FY 2012 the average occupancy rate for all hotel types (59 percent) is up 0.5 percent over the average over the same time period from FY 2011 (58.5 percent). Occupancy rates by hotel type show a nine percent increase for Budget Hotels, 3.3 percent decrease in Mid-Range Hotels, a 0.9 percent decrease in Full Service Hotels, and a 0.9 percent decrease in Extended Stay Hotels. It is likely that continued economic concerns have prompted travelers to use budget hotels versus other more expensive options.
Residential real estate sales volume and value: Through May of CY 2012 a total of 758 residential dwellings have been sold. This equates to a 10.5 percent increase over the same period from FY 2011. This is the highest number of sales realized through this period since CY 2007. Also through May of CY 2012 the three month moving average of the median sales value ($496,583) is up 13.5 percent over the same period from CY 2011.
Potential reasons for the increases include: warmer than typical winter, increased number and value of sales due to development at Potomac Yard and Braddock Road Metro, and a decline in the number of short-sales.
Year-to-Date Revenues: As of June 30, 2012, actual General Fund revenues totaled $555.2 million, which is four percent higher than FY 2011 for the same period. Most of this increase is related to the budgeted real estate and personal property taxes, which have increased four and eight percent, respectively, over last year. The projections in this report include the April re-estimates described in Budget Memo # 48, which anticipated an additional $1.7 million in revenues above those previously budgeted.
- Consumer Utility Taxes: The decrease in these taxes is primarily due to the relatively mild winter.
- Communication Taxes: The decrease in these taxes 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.
- Recordation Tax: The increase in this tax is primarily the result of the sale and refinancing of a few large commercial properties. With historically low interest rates, the number of residential refinancings has also increased.
- Revenue from Federal Government: The decrease in Federal revenue primarily represents the timing of payments for the Federal Prisoner Per Diem.
- Charges for Service: The increase in charges for services is primarily 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.
- Other Revenue: The increase in other revenue resulted from the sale of surplus property.
- Appropriated Refunding Bond Proceeds: In April, the City sold $63.6 million in refunding bonds used to refund part of Series 2001, 2004A, 2004C, and 2006A bonds. Net proceeds of $73.5 million reflected in the table were used to fund an escrow deposit to be used to pay the old bonds.
Year-to-Date Expenditures: As of June 30, 2012, actual General Fund expenditures totaled $557.4 million, an increase of $63.0 million, or 12.5 percent, above expenditures for the same period last year. The revised budget reflects amounts that were appropriated in the supplemental appropriation ordinances approved in November, April, and June, including bond refunding in April. Personnel expenditures remain on par with the budget personnel expenditures. Non-personnel spending increased 19 percent, primarily as a result of the bond refunding. We have closely monitored and controlled these expenditures to be at or below budget after considering the Council actions in the June transfer resolution.
- Community and Human Services: Increased expenditures are the result of a significant increase in Comprehensive Services Act costs in the third quarter, due to an increase in the department’s caseload.
- Debt Service: The increase reflects budgeted debt service for new bonds issued in June 2010 and July 2011 and refunded bonds in April 2012. 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, 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, $0.3 million has been approved for the earthquake only for costs directly associated with the event. The City is responsible for other repairs made at the same time, such as resealing or adding chimney caps. The Tropical Storm Lee cost estimate includes $2.34 million to $3.55 million in damages to the Holmes Run sewer. City Council committed fund balances to offset any costs for direct damamges not reimbursed by FEMA and insurance filings. FEMA has approved $0.7 million to date, and insurance approval is still pending. Initial reviews of the projects indicate that most of the cost is for sanitary sewer work that is not eligible for reimbursement since the projects currently being considered would move these sewer lines from their pre-disaster location. Funding for these projects would need to be considered as part of the FY 2014 budget process.
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.
Finally, the City has incurred costs of about $0.2 million related to Direcho that is also not included in the General Fund.
|Tropical Storm Lee||$2.34 - $3.55million||FEMA approved $0.7 million. Insurance approval of the difference is pending.|
|Hurricane Irene||$0.73 million||$0.33 million approved to date.|
|Earthquake||$0.54 million||$0.3 million approved to date.|
|9/11 Terrorist Preparation||$0.02 million||All City cost.|
|Direcho||$0.22 million||All City cost. |
|February Line of Duty Death Incident, Funeral,|
and Associated Costs (Fire paramedic)
|$0.50 million||City expenses included in the General Fund.|
- 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):