Monthly Financial Report -- November 2012

Page updated on Jan 4, 2013 at 11:44 AM

Presented to City Council by City Manager Rashad M. Young on January 8, 2013.

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.

ECONOMIC HIGHLIGHTS:

  • The national market for existing home sales shows signs of strengthening. Existing home sales increased 5.9 percent in November, the highest rate in three years, and the median sale price for existing homes increased by 10.1 percent over the previous year. The national inventory of existing home sales decreased 3.8 percent, to 4.8 months, the lowest inventory since 2005. 
  • National new housing starts are improving but remain below what market watchers consider to be a healthy rate. New housing starts improved by 3.6 percent in October over the previous month and were 87 percent above the recession low before declining in November as a likely result of Hurricane Sandy. Even with Sandy’s impact, new starts were 21.6 percent higher than the previous year. The seasonally adjusted annual rate of new housing starts in November was 861,000 as compared to the recession low of 478,000 in April 2009. Industry analysts consider 1.5 million new starts to be reflective of a healthy market. 
  • National home values continue to improve, and reports of a return to bidding wars have emerged. Home prices as measured by the S&P/Case-Shiller Home Price Indices increased for the sixth straight month in September by 4 percent over the previous year and 2 percent over the previous quarter. The Boston Globe, U.S. News and Washington Post have each reported increased competitive bidding over residential properties in markets such as Boston, Northern California, Phoenix and Washington, DC. 
  • Despite these positive indicators, the real estate market’s ability to affect overall economic recovery has been reduced. Residential investment in construction, remodeling and associated services has shrunk from six percent of GDP in 2005 to 2.5 percent in the third quarter of 2013, diminishing real estate activity’s impact on the overall economy. Over 20 percent of mortgages were underwater as of this past June, limiting the number of existing homeowners able to contribute to further economic growth.

REVENUE HIGHLIGHTS:

Year-to-Date Revenues:  As of November 30, 2012, actual General Fund revenues totaled $271.6 million, which is 3.0 percent higher than FY 2012 for the same period. Most of this increase is related to general property taxes (real estate and personal property). 

  • Fines and Forfeitures: Collections in this category primarily reflect budgeted increases for red light cameras installed in FY 2012. 
  • Other Local Taxes: The increase is primarily due to the timing of the receipt of telecommunications taxes. 
  • Federal Government: The decrease primarily represents the timing of payments for the Federal Prisoner Per Diem. 
  • Other Revenue: The increase is primarily due to $0.2 million in revenues from the sale of surplus property and insurance recoveries.

EXPENDITURE HIGHLIGHTS:

Year-to-Date Expenditures:  As of November 30, 2012, actual General Fund expenditures totaled $211.3 million, an increase of $14.6 million, or 7.4 percent, above expenditures for the same period last year. Personnel expenditures remain consistent with the budget and are 4.0 percent higher than last year. Non-personnel spending increased 10 percent from the same period in FY 2012, primarily due to budgeted debt service. We are closely monitoring and controlling these expenditures to be at or below budget. 

  • Information Technology Services: The increase represents increases in payroll charges, fees for temporary services, and software payments. 
  • Registrar: The budgeted increase represents the costs for the presidential election. Costs for the additional primary may exceed the budget. Staff will propose a transfer as appropriate in the transfer resolution. 
  • Fire: Fire overtime costs are currently projected to be over the current budget again this year as the number of minimum staffing overtime hours are already higher than at this time last year. However, unlike prior years, this overage is expected to be absorbed within the full-time salaries budget. This is due to an approximately 33 percent turnover of the Department’s firefighters within the last two years. As newer employees are hired, their salaries and overtime costs are lower than those of the senior firefighters who were the only ones eligible to work these hours in previous years. We are also monitoring the costs associated with work-related injuries and the costs associated with the Heart and Lung Act. 
  • Transit Subsidies: The decrease is due to the timing of the City’s payment to WMATA. 
  • Health Department: The Health Department increase is due to the timing of bills received from the Commonwealth for services provided. The payments were made earlier in FY 2013 than in FY 2012. 
  • Debt Service: The increase in debt service reflects planned expenditures for the FY 2012 general obligation and refunding bonds. 
  • Non Departmental: The increase is due to $0.7 million in budgeted funding for Other Post-Employment Benefits. 
  • ACPS Transfer: The transfer is based on a percentage of actual expenditures for the period. The City will provide approximately 75.8 percent of the Schools budget for FY 2013.

Hurricane Sandy: General Fund expenditures include $0.5 million in pay and benefits for employees who were considered essential City staffing during the storm and clean-up efforts. Total costs are currently estimated to reach $0.7 million. At this time, it does not appear likely that the costs will reach the financial threshold to be eligible for FEMA reimbursement.

ONLINE REFERENCES (ATTACHMENTS):



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