Presented to City Council by Acting City Manager Mark Jinks on January 13, 2015.
Through the first five months of FY 2015, year-to-date General Fund revenues and expenditures were within one percent of the four-year average for percent of budget collected and spent to date. Expenditures were 0.2% less than the average rate, while revenues were 0.6% less than the average rate. For reference purposes, in FY 2015 0.2% of the budget is approximately $1.2 million, and 0.6% is approximately $3.8 million. It is important to look at revenues compared to expenditures. While expenditures to-date are tracking below average, revenues are further below average. Revenues will need to exceed expenditures by at least $2.9 million in order to avoid using fund balance for a third straight fiscal year, however at the current rate, expenditures would exceed revenues. If this trend continues, the City will experience a year-end shortfall. In that case, any gap would need to be addressed with changes in departmental spending plans, which would impact programs and services. In January, staff will produce a more comprehensive projection of year-end revenues and expenditures based on data through the midpoint of the fiscal year.
Through the first five months of the fiscal year, revenue received from General Property taxes, including real and personal property, was 0.2% less than the four-year average percent of budget collected. At this point in the fiscal year more than 96% of the budgeted amount of personal property taxes have been collected. The second-half real property payment was due on November 17th and approximately 49% of the budgeted real property tax revenue has been collected. Communication Sales and Use taxes continue to lag compared to the four-year average due to changes in consumer behavior and the tax rates assessed on the bundled services. Other Revenue, consisting of purchase card rebates, insurance recoveries and other miscellaneous items is low compared to the four-year average due to an unusually high amount of insurance recoveries that were received in 2013 ($1.2 million) following significant storm damages in the prior year, which elevates the four-year average rate. As reported in prior months, revenue from the Commonwealth is expected to be $0.8 million less than budget due to a reduction in aid from the State.
As of November 30, 2014, General Fund expenditures totaled $220.3 million, or 34.3% of budgeted expenditures. Compared to the historical four-year average, the City has spent 0.2% less of its budget in FY 2015. Non-personnel expenditures are 0.3% less than the four-year average, and the percent of personnel budget expended is 1.1% lower than the four-year average.
Transient Lodging and Unemployment Rates are the economic indicators highlighted in this month’s report. Alexandria Convention and Visitors Association received statistics from Smith Travel Research indicating that Alexandria’s hotel occupancy rate increased from 59.4% in November 2013 to 67.4% in November 2014. However, the data is skewed as three lower priced hotels in Alexandria have closed recently. Two were converted to apartments and one may re-open later this calendar year. As a result, if the number of rooms rented was the same with or without the closures, the occupancy rate would be higher with the closures due to lower total inventory. The average daily room rate increased by 11% compared to November 2013. Transient Lodging tax collections are 3.4% above the four-year average for percent of budget collected to date, which is helping to offset declines in other taxes in the Other Local Tax category that is overall 1.0% behind the average despite the transient lodging gains. Alexandria’s unemployment rate dropped 0.5% from September 2014 (4.1%) to October 2014 (3.6%), and the number of employed increased by 722 persons. This represents the lowest October unemployment rate in four years. Job growth, however, continues to trail the national average. 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.
As of November 30, 2014, General Fund revenues totaled $294.9 million, which is 0.6% less than the four-year average percent of budget through November. Through the first five months of the fiscal year, the City is 0.2% behind the four year average rate of revenue received for all general property taxes, including real and personal property. The payment deadline for all personal property was October 5th and at this point in the fiscal year more than 96% of the budgeted amount has been collected. The remaining taxes to be collected represent new registrations and delinquent tax collections. The second-half real property payment was due on November 17th and payments to date represent approximately 49% of the budgeted real property tax revenue has been collected. Other local taxes are 1.0% below the four-year average, intergovernmental revenues are 1.4% below average and 1.8% above FY 2014, and other revenues are 3.2% below average.
*4-year average data comes from FY 2011-2014 data
*4-year average data comes from FY 2011-2014 data
Revenue Variances in Detail
As of November 30, 2014, General Fund expenditures totaled $220.3 million, or 34.3% of budgeted expenditures. Compared to the historical four-year average, the City spent has spent 0.2% less of its budget in FY 2015. Personnel expenditures are 1.1% less than the four-year average percent of budget spent to date, and non-personnel expenditures are 0.3% less than average. The charts below comparing the current fiscal year to last year’s percent of budget expended show that non-personnel expenditures exceed last year’s pace, but personnel expenditures are below last year and overall expenditures are roughly equivalent to last year.
Percent of budget expended is slightly higher than last year, but is slightly lower than the 4-year average.
At this point in the fiscal year, the City YTD Personnel continues to be slightly lower than last year.
YTD Non-Personnel expenditures are almost exactly in line with where they were in the previous fiscal year.
Expenditure Variances in Detail
Transient Lodging Tax Receipts
The City of Alexandria’s hotel industry continues to see noticeable improvement. Looking at the Annual Change in Transient Lodging Tax Receipts chart, the change has continued to improve since April, and as of November the three-month trailing average is 13.2% higher than it was at the same month in the previous year. The national outlook for the hotel industry also looks favorable. According to Smith Travel Research, via ACVA, Alexandria’s hotel occupancy rate increased from 59.4% in November 2013 to 67.4% in November 2014. The average daily room rate also increased by 11% compared to November 2013.
Alexandria’s unemployment rate dropped 0.5% from September 2014 (4.1%) to October 2014 (3.6%), and the number of employed increased by 722 persons. This represents the lowest October unemployment rate in four years. Continued decrease to this indicator may potentially translate into a slight rise of consumption based taxes, such as sales taxes and restaurant meals taxes. However, while unemployment has steadily declined since the recession, job growth has yet to recover.
Source: Finance Department
Through November 2014
Source: U.S. Department of Labor, Bureau of Labor Statistics
Alexandria, Virginia through October, U.S. data through November
This is only a sampling of a few economic indicators that the City of Alexandria tracks. Some more information and detail on indicators, please visit the financial report website at: alexandriava.gov/FinancialReports.
Council set aside $7,956 in Contingent Reserves for City-wide street light assessment. Council released these funds on November 11, 2014.