Monthly Financial Report - February 2015

Page updated on Apr 13, 2015 at 11:24 AM

Presented to City Council by Acting City Manager Mark Jinks on April 14, 2015.

Click here to download the full report.

Report Summary

As previously reported through this monthly financial report and the FY 2016 budget development process, slow revenue growth due to economic stagnation continues to be a concern that staff is monitoring carefully. As of receipts through February, revenues are still projected to come in below the amount budgeted, however staff has also been carefully monitoring expenditures and it appears at this point in the fiscal year that the amount of expenditure savings currently projected for year-end will be sufficient to keep expenditures within revenues. 

Through February 2015, year-to-date General Fund revenues collected are 2.0% lower than the four-year average, while General Fund expenditures are tracking within 1.0% of the four-year average of budget spent. City staff have been working to refine year-end revenue and expenditure projections to ensure that actual expenditures are both under budget and in balance with revenues received. A projection of year-end revenues based on collections through February 2015 is has been added to the Comparative Statement of Revenues (Attachment 1 on page 6) in the projected revenue column. On the expenditure side, departments report year-end projections to the Office of Management and Budget on a monthly basis so that expenditures are closely monitored and adjusted if needed. Based on current projections, the City estimates that expenditures may still be higher than current revenues by the end of the year, but the revenue picture has improved slightly.   

As of February 2015, General Fund revenues totaled $351.9 million, or 54.3% of the budgeted revenue. Through the first eight months of the fiscal year, the City is 2.0% below the four-year average rate of budgeted revenue received. Revenue collections through February 2015 provide the City with the complete picture of the holiday season because sales tax revenues remitted from the State in February reflect December sales tax collected in the City. During December 2014, the City collected $2.3 million in local sales tax revenue, which is the second highest amount collected in the month of December in the past 5 years and is slightly greater than the average amount for the past five years. However, while the holiday receipts have improved over recent years, revenues for the entire year-to-date continue to grow slower than budgeted. Through the first eight months of FY 2015 (which is revenue collected over the first six months of FY 2015, due to a 2-month lag on revenue the State remits to the City), the City has collected 47.9% of the budgeted amount for sales tax, which is 2.4% below the average collection rate for the same time period over the past four years. Transient lodging tax revenues continue to compare favorably to the collection rate for the past four years. Business license gross tax receipts will be discussed in next month’s report, as they were due on March 2nd and require several weeks to process.

As of February 28, 2015, General Fund expenditures totaled $382.3 million, or 59.0% of budgeted expenditures. Compared to the historical four-year average, the City spent has spent 0.6% more of its budget in FY 2015, but has spent 0.2% less than last year. Personnel expenditures are 3.0% less than the four-year average percent of budget spent to date, whereas non-personnel expenditures are 2.5% more than average. Most of the variance is attributable to the timing of transfers to the Capital Improvement Program (CIP) and other funds.

The economic indicator highlighted in this month’s report is Transient Lodging. 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.

Revenues

As of February, 2015, General Fund revenues totaled $351.9 million, or 54.3% of the budgeted revenue. Through the first eight months of the fiscal year, the City is 2.0% below the four-year average rate of revenue received. Revenue collections through February 2015 provide the City with the complete picture of the holiday season because sales tax revenues remitted from the State in February reflect December sales tax collected in the City. During December 2014, the City collected $2.3 million in local sales tax revenue, which is the second highest amount collected in December in the past 5 years and is slightly greater than the average amount for the past five years. Looking at sales tax collections in relative terms, through the first six months of FY 2015, the City has collected 47.9% of the budgeted amount for sales tax, which is 2.4% below the average collection rate for the first half of the fiscal year over the past four years.  

Next month’s report will include collections from Business License taxes, as they were due on March 2 and require several weeks to process.  Business License (or Gross Receipts) tax collections may provide a very effective tool for evaluating the health of our business economy. 

FY15 and Historic Monthly Revenues - February 2015

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

February YTD Revenues - Februrary 2015

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

Revenue Variances in Detail

Revenue Variances in Detail - February 2015

Revenue Variances in Detail 2 - February 2015

Expenditures

As of February 28, 2015, General Fund expenditures totaled $382.3 million, or 59.0% of budgeted expenditures. Compared to the historical four-year average, the City spent 0.6% more of its budget in FY 2015, but has spent 0.2% less than last year. Looking at expenditures excluding transfers, the City has spent 2.1% less than the four-year average. Personnel expenditures are 3.0% less than the four-year average percent of budget spent to date, whereas non-personnel expenditures are 2.5% more than average. The charts below compare the current fiscal year to last year’s percent of budget expended for non-personnel, personnel, and total expenditures. Noticeable variances in expenditures from the four-year average include departments with vacancies, Cash Capital, and Cash Match for grants. Cash Capital transfers occurred for the first time this year in February. Variances are detailed in the table below. Overall, the City is still on track to keep expenditures within budget for FY 2015. However, given the revenue outlook for the remainder of the year, expenditures continued to be monitored to ensure that the City’s expenditures remain lower than revenue collected.

FY15 vs FY14 YTD Expenditures - February 2015

*Percent of budget expended is 0.2% lower than in FY14, but is 0.6% higher than the 4-year average.

YTD Personnel Expenditures - February 2015

*At this point in the fiscal year, the City YTD personnel costs are 2.5% lower than this month last year. Salaries and benefits are 3.0% below the 4-year average.

YTD Non-Personnel Expenditures - February 2015 

*YTD non-personnel expenditures are 1.7% higher than this point in FY14, and 2.5% higher than the 4-year average.

Expenditure Variances in Detail

Expenditure Variances in Detail - February 2015

Economic Indicators

Transient Lodging Tax Receipts
The Alexandria Convention and Visitors Association received statistics from Smith Travel Research that indicates despite poor weather in February, Alexandria lodging numbers were strong. When comparing February 2015 to February 2014, occupancy rates increased by 8.5%, the daily rate increased by 3.9%, and Revenue Per Available Room increased by 12.7%. These were the largest increases of any of our regional competitors (DC actually saw all three metrics decreased compared with 2014). However, room supply is at a low point in February 2015 – the Smith Travel Research report has fully incorporated the loss of Washington Suites now in addition to the Holiday Inn Eisenhower and Hawthorn Suites. Room availability is down 12.4%, but room revenue still increased by 10.4% from the three month average.  

Annual Change in Transient Lodging Tax Receipts - February 2015

Top