Monthly Financial Report - October 2014

Page updated on Dec 5, 2014 at 2:36 PM

Presented to City Council by City Manager Rashad M. Young on December 9, 2014.

Click here to download the full report.

Report Summary

Through the first four months of FY 2015, year-to-date General Fund revenues and expenditures were in line with the four-year average of percent of budget collected and spent.

As of October 31, 2014, actual General Fund revenues totaled $140.7 million, which is 2.7% more than the four-year average percent of budget collected. Revenue collections are mostly consistent with the four year averages, with a few notable exceptions. Personal Property is up slightly compared to the four year average. This is due to increased collection and enforcement efforts by staff, as well as efforts made during the summer to improve the accuracy of assessments and to verify taxpayer address information. Communications tax revenue continues to decline as changes in the industry from the bundling of services lead to lower tax rates and changes in consumer preferences lead to lower utilization of phone and cable services. Some real property tax revenue has begun to come in, but Real property taxes are due November 17, 2014. These collections will be fully detailed in next month’s report, as they are a substantial revenue source for the City.

As of October 31, 2014, General Fund expenditures totaled $183.6 million, or 28.8% of budgeted expenditures. Compared to the historical four-year average through October, the City spent only 0.2% more of its budget in FY 2015. Given payrolls processed as of the end of October, the City was $4.1 million dollars under its personnel budget. However, the City has spent a higher percent of YTD non-personnel expenditures than it has in the past due primarily to the transfer of funds to the City’s new Northern Virginia Transportation Authority fund, which is required to receive the City’s 30% share of state transportation revenues.

Total Commonwealth General Fund revenue collections increased by 4.4% in October, accounting for an increase of $55.6 million compared to October 2013. Fiscal year-to-date revenue collections increased by 6.7% or $305.9 million in October, ahead of the annual estimate of 2.9% growth. An increase in state revenues does not necessarily mean restoration of funds to localities. 

The Virginia Department of Planning and Budget has announced the amount that each locality must give back to the State (Local Aid to the State) as part of the State’s plan to address revenue shortfalls.  The amount for the City of Alexandria is $633,464 for FY 2015.  Staff previously estimated this amount to be $648,000. The City has elected to take the reduction out of programs with revenue sources allocated to the General Fund, such as Compensation Board reimbursements, State Board of Elections, and State HB599 (Aid to Police Departments). This, combined with a $215,000 shortfall in State HB 599 revenue, results in an overall State revenue shortfall of approximately $848,000.  Staff will continue to closely monitor the FY 2015 revenue picture and may recommend changes to the level of service provided if the strength in other revenue categories cannot make up the difference.

Office vacancies is the economic indicator highlighted in this month’s report. Additional economic, revenue, and expenditure charts are also available on the City of Alexandria website at: alexandriava.gov/FinancialReports. Attached are General Fund revenue and expenditure tables produced by the Finance Department.

Attachments

Revenue

As of October 31, 2014, actual General Fund revenues totaled $140.7 million, which is 2.7% more than the four-year average percent of budget through October. Through the first four months of the fiscal year, revenue collections are mostly consistent with the four year averages, with a few notable exceptions. Personal Property is up slightly compared to the four year average.  This is due to increased collection and enforcement efforts by staff, as well as efforts made during the summer to improve the accuracy of assessments and to verify taxpayer address information.  Communications tax revenue continues to decline as changes in the industry from the bundling of services lead to lower tax rates and changes in consumer preferences lead to lower utilization of phone and cable services. The table below further details revenue variances as compared to the four-year average.

FY15 and Historic Monthly Revenues - October 2014 (2)

*4-year average data comes from FY 2011 - FY 2014 data

October YTD Revenues - October 2014

*4-year average data comes from FY 2011 - FY 2014 data

Revenue Variances in Detail

Revenue Variances in Detail - October 2014


Expenditures

As of October 31, 2014,  General Fund expenditures totaled $183,598,532, or 28.8% of budgeted expenditures. Compared to the historical four-year average, the City spent only 0.2% more of its budget in FY 2015. At this point in the fiscal year, the YTD expenditures in FY15 and FY14 are very similar, as seen in the YTD expenditure graph. The YTD non-personnel graph shows that the City has spent a slightly higher percentage on non-personnel expenditures in FY 2015 thus far than it did in the previous year.  This is due primarily to the transfer of funds to the City’s new Northern Virginia Transportation Authority fund, which is required to receive the City’s 30% share of state transportation revenues. However, personnel savings continue to increase and as of the end of October totaled $4.1 million. Furthermore, the YTD personnel expenditure graph shows that the City has spent less of its personnel budget when compared to this point in time last year.  Variances in expenditures detailed below include salary and benefits and cash match.   Overall, the City’s expenditures continue to track similarly to the past.

FY15 vs FY14 YTD Expenditures - October 2014

Percent of budget expended is slightly higher than last year.

YTD Personnel Expenditures - October 2014  

At this point in the fiscal year, the City has spent 1.9% less of its personnel budget than in FY14.

YTD Non-Personnel Expenditures - October 2014

YTD Non-Personnel expenditures continue to be slightly above where they were in the previous fiscal year.

Expenditure Variances in Detail

Expenditure Variances in Detail - October 2014


Economic Indicators

Office Vacancy Rates

Office vacancy rates are updated quarterly, and the most updated data is through the  third quarter of Calendar Year 2014. 16.8% of Alexandria’s office space was unoccupied as of the Q3 2014. Third quarter 2014 office vacancy rates are slightly higher than one year ago, but are lower than vacancy rates in Q2 2014 by 0.3%. The chart below shows that office vacancy rates in Alexandria have remained elevated since 2011.  Alexandria has a higher office vacancy rate than both Northern Virginia and the DC Metro Area.  For Alexandria, Northern Virginia, and the entire DC Metro area, vacancy rates continue to be higher now than they were during the recession of 2007-2008.

Office Vacancy Rates - October 2014

Source: CoStar Through 3rd quarter 2014.


Contingent Reserves

Council set aside $7,956 in Contingent Reserves for City-wide street light assessment.  Council released these funds on November 11, 2014.

 

Top