Monthly Financial Report for the Period Ending January 31, 2011
Presented as a memo to City Council from City Manager James K. Hartmann on March 8, 2011.
Download Original Signed Memo (PDF)
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.
- The national economy continued to recover slowly. Gross national product increased slightly in calendar year 2010. The rate of growth was 2.8 percent over 2009. The fourth quarter GDP also grew 2.8 percent over the previous year.
- The national unemployment rate decreased to 9.0 percent in January. Alexandria’s December rate of 4.4 percent decreased from 4.6 percent in November and 4.6 percent at this point last year.
- Local economic indicators showed improvement. Local sales and meals tax revenues improved over last year and their growth exceeded that of the previous month. Hotel room rental occupancy decreased slightly, but room rates increased.
- Commercial construction spending is sluggish at the national and local levels, while residential construction spending is sluggish at the national level but improving at the local level. National construction spending for residential and commercial projects decreased in January. The number of residential construction projects in Alexandria has returned to FY 2009 levels, but the value of commercial construction continues to trail prior years. By the end of 2011, based on projects in the pipeline, it is expected that the value of new multi-family construction will exceed 2010 levels.
Year-to-Date Revenues: As of January 31, 2011, actual General Fund revenues totaled $280.4 million, which is 2.2 percent higher than FY 2010 revenues for the same period last year. Most of this increase is related to the other local taxes category, which is up 6.0 percent over last year. The FY 2012 Proposed Budget contains a revised estimate for FY 2011 revenues. That estimate shows a revenue surplus of $12.5 million or 2.3 percent compared to the original FY 2011 budget estimate of General Fund revenues for $526.1 million, primarily due to real property revenues (due to higher assessments than previously forecast). As discussed at the October Council Retreat, this surplus was set aside primarily for capital.
- Business License Tax: The increase in this category reflects a change in the timing of payments due to an increase in the number of businesses on quarterly payment plans.
- Licenses and Permits: The category decrease is due to the transfer of the approximate $3.8 million budget for new construction fees from the General Fund to a special revenue account beginning July 1, 2010, where they will be used to cover the cost of Code Enforcement’s New Construction Division, which is now self-financed from these permit fees.
- Revenue from the Federal Government: The City has received $1.2 million in FY 2011 for the Build America Bonds subsidy as compared to $0.4 million in FY 2010.
Year-to-Date Expenditures: As of January 31, 2011, actual General Fund expenditures totaled $272.7 million, an increase of $9.0 million, or 3.4 percent, above expenditures for the same period last year. The revised budget reflects amounts that were appropriated in the supplemental appropriation ordinance approved in December. 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 4.8 percent. For most departments, differences in spending patterns for non- personnel in the first seven months of the year reflect the timing of bill payments and not necessarily changes in spending patterns. We are closely monitoring and controlling these expenditures to be at or below budget.
- Fire: As discussed orally at the January 11, 2011 City Council meeting, the Fire Department is projected to be over budget due to overtime expenditures, primarily due to a large number of firefighter and medic vacancies in the Department during the first half of the year. The Department and OMB will continue to monitor overtime and other expenditures and revise the projections as needed. We plan to forecast this deficit more precisely in next month’s report.
- Debt Service: The increase reflects budgeted debt service for bonds issued in June 2009. A portion of the interest cost ($1.2 million) is reimbursed from the federal government as part of the Build America Bond program.
- Schools: The City currently provides approximately 76 percent of the estimated funds required to operate the City public school system in FY 2011.
ONLINE REFERENCES (ATTACHMENTS):