City of Alexandria, Virginia
________________
MEMORANDUM
DATE: MARCH 4, 2020
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: MARK B. JINKS, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of the Monthly Financial Report for the Period Ending January 31, 2020.
BODY
_________________________________________________________________
ISSUE: Receipt of the Monthly Financial Report for the Period Ending January 31, 2020.
RECOMMENDATION: That City Council receives the Monthly Financial Report (Attachment 1).
BACKGROUND: The following discussion is a summary of the Monthly Financial Report for this period. Schedules comparing revenues and expenditures to date to the same period in
FY 2019 are attached.
REVENUES: At this time in FY 2020, the City’s revenue and expenditures are not noticeably different than the same time period last year. As of January 31, 2020, General Fund revenues totaled $394.5 million, an increase of $21.1 million or 5.6% above revenues collected at the same time in FY 2019. After seven months in FY 2020, approximately 50.7 percent of budgeted revenues have been collected. Revenues may not track consistently with the calendar since many revenue sources have due dates that do not occur evenly through the year. Large revenue sources, such as real estate and personal property tax revenues are remitted twice per year and once per year, respectively. Personal property taxes were due on October 5th. Personal Property tax revenue is $52.5 million or 10.8 percent higher than collections for the same period last year. With the elimination of the decal, the motor vehicle license fee was eliminated. The personal property tax rate was increased to offset this fee elimination. The second half of the calendar year real estate tax were due on November 15th. Revenue from real property taxes is consistent with the budgeted amount in FY 2020 and the amount collected in FY 2019 through December. The next major tax type that is due is Business License taxes, which are due on March 1.
In other local taxes, local sales tax is trending 10.1 percent over collections in FY 2019. Sales tax revenue is remitted by the State, two months after it is collected. Through 7 months of the fiscal year, the City has received 5 months of local sales tax revenue. Recordation tax is also comparing favorably to FY 2019. Through January 2020, collections reflect 66.6 percent of the budgeted amount and exceed collections for the same period in FY 2019 by 32.6 percent. It should be noted that nearly all tax revenue sources that are driven by consumer spending and confidence are performing at or above projected amounts. This is largely attributable to low unemployment, high consumer confidence and diminished fears of an imminent recession. Variances in intergovernmental revenue from the Commonwealth and Transfers from Other Funds are related to the timing of payments or posting.
With the presentation of the City Manager’s Proposed FY 2021 Operating budget, the Monthly Financial Report includes a projection of total General Fund revenues for the year. Most categories of revenues are expected to meet or exceed the FY 2020 budgeted amount. Communication Sales and Use tax continues to decline each year due to consumer behavioral changes related to telecommunications and television. With the refunding of the City’s Build America Bonds in 2017, the subsidy that is received from the federal government is being eliminated. The revenue is offset by lower costs for debt service on the new debt. Conversely, interest rates are significantly lower than assumed during the development of the FY 2020 budget and are resulting in lower Revenue from Use of Money and Property compared to FY 2019 and compared to the FY 2020 budgeted amount.
EXPENDITURES: As of January 31, 2020, General Fund expenditures totaled $398.4 million, an increase of $2.6 million compared to the same time period for FY 2019. Similar to the situation with revenues, no significant expenditure has occurred in the first seven months of Fiscal Year 2020 that is unbudgeted or unexpected. The most significant difference is the timing and source of payments. The variance in the Department of Transportation and Environmental Services is largely attributable to the shift of the residential curbside refuse collection program from the General Fund (in FY 2019) to a self-supported fund in FY 2020. This is offset by the transfer of the Fleet Services Division from General Services, which is showing a 15.0 percent decline in spending compared to FY 2019, to TES in FY 2020. The variance in the Office of Performance and Accountability relates to software user licenses and costs associated with the Resident Survey. In FY 2019, the Transfer to Housing was included in Cash Match and Transfers to Special Revenue. In FY 2020, this transfer is displayed separately to provide additional transparency.
ATTACHMENTS:
Attachment 1: Comparative Expenditure Schedule for December 31, 2019
Attachment 2: Comparative Revenue Schedule for December 31, 2019
Attachment 3: Economic Indicators
STAFF:
Laura Triggs, Deputy City Manager
Kendel Taylor, Director, Finance Department
Morgan Routt, Director, OMB