Monthly Financial Report -- August 2011

Page updated on Feb 26, 2020 at 2:20 PM

Presented to City Council by Acting City Manager Bruce Johnson on October 11, 2011. 

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.

Final revenues and expenditures for FY 2011 will be reported later this fall in the City’s audited Comprehensive Annual Financial Report (CAFR).  As discussed at the September 13 City Council meeting, we have produced a $9.8 million surplus compared to the previously planned, budgeted and reserved revenue and expenditure amounts. This surplus is proposed to be used for: (1) $2.7 million to increase uncommitted, unassigned fund balance equal to 5.5% of General Fund revenues as set by City financial/debt policy guidelines; (2) to establish an additional $4.0 million reserve that may be needed to meet arise from either national economic or federal budget political uncertainties; (3) $1.5 million to meet the costs of disasters or other emergencies; and (4) $1.6 million to prepare for emergencies by improving emergency response capabilities. 


  • The City’s employment situation improved in July.  The Alexandria unemployment rate fell to 4.5 percent in July from 4.8 percent in June as employment growth began to outpace growth in the labor force.  The City’s labor force grew 0.9 percent in July while employment increased by 1.2 percent.  
  • There are some indicators of problems in the state and national labor markets.  Virginia unemployment increased to a seasonally-adjusted 6.3 percent in August, up from 6.1 percent in July.  National unemployment in August remained flat at 9.1 percent, reflecting no change in employment.  However, the number of persons working part-time for economic reasons increased from 8.4 million in July to 8.8 million in August and the number of persons considered marginally attached to the labor force increased to 2.6 million from 2.4 million in the same period last year.
  • The state of the local economy remains uncertain.  The potential for federal budget reductions and the flattening of local tax indicators raise concerns about future City revenues.    
  • Nationally real average hourly earnings for all employees continued to fall in August.  Seasonally adjusted real average hourly earnings decreased 0.6 percent in August, contributing to a 1.9 percent year-on-year decrease.  Real average hourly earnings for production and non-supervisory employees fell 0.6 percent in August, contributing to a 2.3 percent year-on-year decrease.  Since 70 percent of the national economy comes from consumer demand, declining earnings (combined with persistently high unemployment) are a troubling sign.
  • Inflation slowed slightly in August but is still significant.  The national Consumer Price Index for All Urban Consumers increased 0.4 percent in August on a seasonally adjusted basis, compared to 0.5 percent in July.  However, the year-over-year increase of 3.8 percent before seasonal adjustment was the largest since September 2008.  The core CPI excluding food and energy increased by 0.2 percent in August, leading to a year-on-year increase of 2.0 percent, which was the largest since November 2008.  Washington regional CPI data for this period will not be available until October.  
  • New Federal Reserve policy to drive down interest rates.  On Wednesday, September 21, the Federal Reserve announced the launch of “Operation Twist.”  Operation Twist shifted $400 billion from the Federal Reserve’s treasury securities holdings into longer-term debt, the result of which has driven long term interest rates to new record lows (e.g. 30 yr. fixed mortgages fell 18 percent while 15 yr. fixed fell 8 percent in the first week).  The intent is to stimulate the economy by making it easier for consumers to borrow on home and business loans.  However, the effectiveness of this policy is still an open question. Demand for new mortgages recently fell to a 15-year low at what were already record low interest rates.  Also, financial institutions are under tremendous strains due to the European debt crisis and declining stock prices.  The health of this sector of the economy may potentially impact the long term health of the rest of the economy.


Year-to-Date Revenues:  As of August 30, 2011, actual General Fund revenues totaled $21.5 million, which approximates FY 2011 revenues for the same period last year.  Government accounting principles require that most taxes and intergovernmental revenues received in July are counted as revenue for the fiscal year ended June 30, 2011. See the online reference for more information. Two months does not provide enough data to recognize any trends either positive or negative. 

  • Personal Property Taxes/Motor Vehicle License:  The increase is a result of earlier payments by taxpayers.  Bills could be mailed earlier in FY 2012 than in FY 2011.
  • Charges for Service:  The increase is result of the budgeted increase in meter fees implemented for the newly installed multi meters. 


Year-to-Date Expenditures:  As of August 30, 2011, actual General Fund expenditures totaled $71.7 million, an increase of $12.1 million, or 20.4 percent, above expenditures for the same period last year. Most of this increase is the result of one additional pay period being posted in FY 2012 through August as compared to FY 2011.

There are several departmental changes approved for FY 2012.  Funds for the Department of Mental Health, Mental Retardation and Substance Abuse; the Department of Human Services; and the Office on Women are now appropriated into one agency: the Department of Community and Human Services.  The Department of Emergency & Customer Communications, which was established in March of FY 2010, was expanded in February 2011 with the consolidation of the emergency and customer communications functions of the Police and Fire Departments into the new department.  When possible for comparison purposes, prior year amounts have been moved to the new departments.

  • Health Department:  The decrease reflects the timing of bills received from the Commonwealth for services provided.
  • Fire Department:  As discussed during several City Council legislative meetings and during the FY 2012 budget process, the Fire Department has a continued 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.  Also, a new Fire recruit class is underway that should begin to reduce the need for overtime late in FY 2012, but for now adds to the Fire Department’s personnel costs.  The Fire Department is projected to be over the current budget as adopted by City Council. OMB and Fire staff will continue to monitor overtime and other expenditures and revise the projections as needed.
  • Transit Subsidies:  The State is currently withholding its monthly payments to the Northern Virginia Transportation Commission (NVTC) unless NVTC agrees to appoint State representatives to the Washington Metropolitan Area Transit Authority (WMATA) Board of Directors and potentially some other local transit operating boards such as DASH.  For FY 2012, the City is budgeted to utilize $16.5 million in NVTC revenue to fund a portion of the City’s $22.2 million WMATA operating subsidy, with the remainder budgeted to be paid from the General Fund.  To date, the City has completed its first two quarterly payments to WMATA.  It is estimated there will be sufficient funding at NVTC from capital reimbursements and motor fuel sales tax revenues for the City to make its third quarter payment (due January 1) utilizing existing funds.  However, if the State has not resolved the representative issue and State aid has not been restored by WMATA’s March 1st fourth quarter due date, the City may be required to identify a new funding source for the transit subsidy budget to compensate for the loss of State funding.  Staff will continue to monitor and advise City Council on this issue. 
  • Debt Service:  The increase reflects budgeted debt service for new bonds issued in June 2009 and June 2010.  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:  The decrease in expenditures is a result of a difference in the timing of payments to one of the City’s closed pension plans.  Please note that General Fund expenditures do not include the costs shown in the following table.  The City has been included in the presidential declaration for Hurricane Irene, which makes certain expenditures eligible for federal re-imbursement.  Staff is currently in the process of developing the reimbursement request.





Tropical Storm Lee

$1.35 million

No declaration yet.

Hurricane Irene

0.70 million

Declaration could reduce to between $0.2 and $0.3 million.


0.50 million


9/11 Terrorist Preparation

0.02 million


Total Range: Estimated between $0.7 to $2.6 million depending on the amounts reimbursed.

  • Schools:  The City will provide approximately 75 percent of the estimated funds required to operate the City public school system in FY 2012. School expenditure data will be provided by the School administration in the September Financial Report, following the first month of school operations.