City of Alexandria, Virginia
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MEMORANDUM
DATE: FEBRUARY 7, 2023
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER
FROM: KENDEL TAYLOR, INTERIM DEPUTY CITY MANAGER
DOCKET TITLE:
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Consideration of the Monthly Financial Report for the Period Ending December 31, 2022.
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ISSUE: Receipt of the Monthly Financial Report for the Period Ending December 31, 2022.
RECOMMENDATION: That City Council receives the Monthly Financial Report.
BACKGROUND: The following discussion is a summary of the Monthly Financial Report for this period. Detailed comparative schedules of General Fund Revenues (Attachment 1) and General Fund Expenditures (Attachment 2).
As of December 31, 2022, General Fund revenues totaled $421.7 million, a difference of $27.4 million or 6.9 percent compared to the same period in FY 2022. Revenue does not track evenly throughout the year since many revenue sources have due dates that do not occur evenly throughout the year. The largest revenue source, real estate tax, is remitted twice per year. Personal property tax revenue is due on October 5 each year. Through the first six months of the year, no category is showing any significant economic variance from the budgeted amount.
Personal Property tax revenue collections in FY 2023 are higher compared to last year, which is to be expected given the increase in the budgeted amount. Through the end of December, Personal Property taxes total $60.4 million or 90.4 percent of the budgeted amount, compared to $53.4 million in FY 2022, which was 96.8 percent of the budgeted amount. The FY 2022 budgeted amount was developed during the uncertainties of COVID-19. Collections for personal property tax revenue are tracking at the expected rate.
Real Estate tax revenue is remitted to the City twice each year, in November and June. As of December 2022, the City has collected $249.5 million or 48.5 percent of the budgeted amount of Real Property tax revenue compared to $232.9 million in FY 2022, which represented 48.2 percent of the budgeted amount.
There are several significant differences between FY 2022 and FY 2023, but they are primarily timing, not economic. The technical change to the ARPA projects results in a Transfer from Other Funds of $4.1 million in FY 2023, where no such transfer existed in FY 2022. Other Revenue includes the $1.0 million gift to the City associated with the Winkler Preserve, which will be allocated at a later date for programs stipulated by the gift. Finally, the increases in the interest rates by the Federal Reserve are resulting in a significant increase in the City’s Revenue from Use of Money and Property. Through the first six months of the year interest earnings account for $7.6 million of the $8.9 million of Revenue from Use of Money and Property. This compares to only $0.2 million through the first six months of FY 2022. Attachment 3 provides the 2nd Quarter Investment Report. The weighted average yield of the City’s portfolio was 3.5 percent during the 2nd quarter of FY 2023.
Attachment 4 compares the consumer spending categories of Sales Tax, Transient Lodging Tax and Meals Sales Tax to the pre-pandemic levels. As previously noted, Sales Tax revenue was largely unimpacted by the pandemic, with the exception of April and May 2019 when many businesses were completely closed. Meals Tax revenue has recovered to pre-pandemic levels and the trend line follows typical seasonal patterns. Transient Lodging Tax revenue has not returned to pre-pandemic levels. Although receipts in August 2022 were less than one percent below the revenue generated in August 2019, the variance continued to widen this fall and November revenue of $0.9 million is more than 10 percent below revenue of $1.0 million collected in November 2019 before the pandemic. It is important to note that Transient Lodging Tax revenue is well ahead of this same point last year and is consistent with the budgeted amount for
FY 2023. It is also very important to note that Transient Lodging Tax revenue only accounts for 1.3 percent of total tax revenue.
As of December 31, 2022, General Fund expenditures totaled $404.5 million, a difference of $26.1 million more than the same time period for FY 2022. Similar to the situation with revenues, no significant expenditure has occurred in the first six months of Fiscal Year 2023 that is unbudgeted or unexpected. Increases correspond to budgeted increases in expenditure categories, such as debt service, cash capital and the transfer to the Schools.
ATTACHMENTS:
Attachment 1: Comparative Statement of General Fund Revenues
Attachment 2: Comparative Statement of General Fund Expenditures
Attachment 3: 2nd Quarter Investment Report
Attachment 4: Consumer Spending comparison charts
STAFF:
Morgan Routt, Director, Office and Management and Budget
Kevin Greenlief, Assistant Director, Finance Department