Monthly Financial Report - September 2014

Page updated on Nov 10, 2014 at 10:57 AM

Presented to City Council by City Manager Rashad M. Young on November 11, 2014.

Report Summary

At the end of the first quarter of FY 2015, year-to-date General Fund revenues and expenditures were similar to the four-year average of percent of budget collected and spent.

As of September 30, 2014, actual General Fund revenues totaled $56.1 million or 8.8% of budgeted revenues, which is 1% less than the four-year average. Through the first quarter of the fiscal year the City’s revenue categories remain fairly flat.  Vehicle and Business Personal Property taxes were due in early October.  The Monthly Financial Report presented to City Council  in December will provide the first insight into property tax collections for FY 2015.

As of September 30, 2014, General Fund expenditures totaled $139.7 million, or 21.9% of budgeted expenditures. Compared to the 4-year average at this point in the year, the City spent only 0.4% more of its budget in FY 2015 than in the past.   Non-personnel expenditures, were slightly higher than they have been in the past, but this was offset by lower personnel expenditures.

Earlier this month, the Governor announced that total Commonwealth General Fund revenue collections increased by 5.3% in September, with individual income taxes, sales taxes, and corporate income taxes accounting for an increase of $81.3 million compared to September 2013. Fiscal year-to-date revenue collections increased by 6.7% or $250.3 million in September, ahead of the annual estimate of 2.9% growth.  It is too early to determine if an increase in state sales tax revenues will correlate to an increase in City sales tax revenues.  Furthermore, an increase in state revenues does not necessarily mean restoration of funds to localities (the August Monthly Financial Report detailed how State aid to the City has been reduced by $863,000).  Staff will continue to monitor state revenues throughout the course of the fiscal year and provide regular updates. 

The economic indicator detailed this month is the City’s transient lodging tax receipts.  According to Smith Travel Research, via ACVA, when comparing year to date occupancy and daily  room rates through September, Alexandria’s occupancy rate increased from 71.6% to 76.0%, while the average daily room rate increased from $129 to $138 or 7 percent.  This trend bodes well for travel and tourism revenue for the City moving forward and suggests that the low room rates characteristic of last year are not a concern at this point in time. Additional economic, revenue, and expenditure charts are also available on the City of Alexandria website at: alexandriava.gov/FinancialReports.

Revenues

As of September 30, 2014 actual General Fund revenues totaled $56.1 million, which is 1% less than the four- year average. Through the first quarter of the fiscal year, the City’s revenue categories remain fairly flat.  In particular, revenue sources that are driven by consumer confidence, such as restaurant meals and admission tax, continue to perform at a lower level compared to the four-year average.  Vehicle and Business Personal Property taxes were due in early October.  The Monthly Financial Report presented to City Council  in December will provide the first insight into property tax collections for FY 2015.   

FY15 and Historic Monthly Revenues

*4-year average data comes from FY2010 - FY2014 data

September YTD Revenues

*4-year average data comes from FY2010 - FY2014 data

Revenue Variances in Detail

Revenue Variances in Detail - September 2014

Expenditures

As of September 30, 2014, General Fund expenditures totaled $139,719,212, or 21.9% of budgeted expenditures. Compared to the historical four-year average for the first quarter of the fiscal year, the City spent only 0.4% more of its budget in FY 2015.  The YTD non-personnel graph shows that the City has spent a slightly higher percentage on non-personnel expenditures in the first three months of FY 2015 than it did in the previous year. However, personnel expenditures are below those of last year, as seen by the YTD Personnel expenditure chart.  YTD personnel savings total $3.2 million. The YTD expenditures graph on the left shows that differences in personnel and non-personnel expenditures more or less balance out when looking at total expenditures.   Staff have analyzed noticeable variances in expenditures from the four-year average and determined that they are due to timing of payments (and have detailed the most noticeable variance in the table below). Overall, the City’s first quarter expenditures continue to track similarly to the past.

FY15 vs FY14 YTD expenditures - September 2014

*Percent of budget expended is in line with spending from last year

YTD Personnel Expenditures - September 2014

*Personnel expenditures in the first quarter have been a lower percent of budget than compared to last year

YTD Non-Personnel Expenditures

*Monthly Non-personnel expenditures continue to be slightly above where they were in the previous fiscal year

Expenditure Variances in Detail

Expenditure Variances in Detail - September 2014

Economic Indicators

Transient Lodging Tax Receipts

The City of Alexandria’s hotel industry has seen noticeable improvement in the last few months.  Looking at the Annual Change in Transient Lodging  Tax Receipts chart, the change has continued to improve since April, and as of September was close to 28.4% higher than it was at the same time in the previous year.  Both occupancy and daily rates affect these receipts, and both have increased regionally. In Northern Virginia, occupancy rates increased from 0.9% to 38.2% (depending on category of hotel) from September 2013, and the daily rate increased by 10.4%.  The national outlook for the hotel industry also looks favorable.  According to Smith Travel Research,  national occupancy rates in September were up 3.9% to 65.7% occupancy and the average daily rate rose 9.5% compared to September 2013.  The trend in these receipts bodes well for travel and tourism revenue for the City moving forward and suggests that the low room rates characteristic of last year are not a concern at this point in time.

Annual Change in Transient Lodging Tax Receipts - September 2014

*Source: Finance Department - Through September 2014

Contingent Reserves

Council set aside $7,956 in Contingent Reserves for City-wide street light assessment.  As of September 30, 2014, it has not been released.


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