Presented as a memo to City Council from City Manager James K. Hartmann on November 9, 2010.
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- The economy continues to grow at a subdued pace. Many of the economic indicators including unemployment rates and inflation have changed little since September 2009.
- Alexandria’s economy is relatively strong compared to the national economy. Meals tax and transient lodging receipts are positive compared to last year, while sales tax collections lag. Unemployment, though high by Alexandria’s historical standards, is much better than the nationwide or statewide employment numbers.
- Residential real estate market assessments are expected to be flat or increase slightly this year, with the average sales price up 2.7 percent compared to last year. However, sales volume over the last three months has decreased by 18 percent compared to a similar period in 2009.
- The City’s CY 11 commercial real estate assessments are expected to be higher than originally expected in the FY 2011 Approved Budget, with an increase of about 2.8 percent. Preliminary estimates show assessment growth in the multi-family sector may be over 5 percent.
Year-to-Date Revenues: As of September 30, 2010, actual General Fund revenues totaled $52.6 million, which is 1.0 percent less than FY 2010 revenues for the same period last year. Government accounting principles require that most taxes and intergovernmental revenues received in July and August are counted as revenue for the fiscal year ended June 30, 2010.
- Licenses and Permits: The category decrease is due to the transfer of approximately $3.8 million in 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.
Year-to-Date Expenditures: As of September 30, 2010, actual General Fund expenditures totaled $114.3 million, an increase of $5.4 million, or 5.0 percent, above expenditures for the same period last year. Personnel expenditures remain on par with last year. These personnel expenditures are 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. Also, funds to pay for the implementation of pay adjustments due to the Watson Wyatt Study, which were effective July 1, 2010, are yet to be appropriated in a supplemental appropriation ordinance, now scheduled for December. Non-personnel spending increased 8.9 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 closely monitoring and controlling these expenditures to be at or below budget.
- Debt Service: The increase reflects budgeted debt service for bonds issued in June 2009.
- Schools: The City will provide approximately 76 percent of the estimated funds required to operate the City public school system in FY 2011.
FISCAL YEAR 2010 CLOSEOUT:
Discussion at previous council meetings showed that the unreserved fund balance at the end of FY 2010 will be $3.0 million higher than the April projection. City staff discussed these fund balance and possible uses in a docket item on October 26th. City staff will include proposed commitments and assignments of these fund balances in the context of the Comprehensive Annual Financial Report docket item, which will be docketed for Council consideration at the November 23 legislative meeting.