COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

FY05 First Quarter Financial Report

 

 

SUBJECT/PROPOSAL/REQUEST:

Presentation of the Year-To-Date Quarterly Financial Report for the Three Months Ended September 30, 2004

 

 

STAFF CONTACT(S):

Messrs. Tucker, Wiggans, Breeden, Walters

Ms. White

 

LEGAL REVIEW:   No

 

AGENDA DATE:

November 3, 2004

 

ACTION:                            INFORMATION:     X

 

CONSENT AGENDA:

  ACTION:                          INFORMATION:   

 

 

ATTACHMENTS:    Yes

 

 

REVIEWED BY:

 

 

 

BACKGROUND:

The attached Quarterly Financial Report provides information on the County’s General Fund and Fund Balance as of September 30, 2004.  The financial report includes a bar-chart report that compares current fiscal year revenue and expenditure data with data from the previous fiscal year.

 

 

STRATEGIC PLAN:

4.2 Fund County services in a fair, efficient manner and provide needed county public facilities and infrastructure

 

 

DISCUSSION:

($ In Millions)

A.                  Attachment A: General Fund Quarterly Financial Report:

 

1.       Revenues:

The Department of Finance estimates that the current fiscal year General Fund revenues will exceed appropriated revenues by $0.236 million, 0.1%.  The use of $2.920 million of fund balance (see attachment C) results in a total revenue, transfer, and use of fund balance increase of $3.156 million, 2.0%, over the appropriated revenues of $159.848 million.

 

·         Real Estate Tax revenues, including delinquent tax collections, are estimated to exceed appropriated revenues by $0.244.  Realized new construction for tax year 2004 is approximately $0.200 million less than the 2003 tax bills.  This number will firm up as the reassessment is completed.  The final estimate will be reported with the January revenue projections.  The 2005 reassessment increase is currently estimated to be 17.5%, up from the previous 15.0% used for preparation of the FY05 budget.

·         Personal Property Tax revenues, including delinquent tax collections, but not PPTR payments, are estimated to be $0.400 million, (-2.9%), less than appropriated revenues.  The primary reason for the reduction is due to a change in assessment methodology by the National Automotive Dealers Association (NADA), resulting in significantly lower used vehicle values.  This is compounded by continued new vehicle purchase incentives further depressing used vehicle values.  Unfortunately, this trend appears to be continuing.

·         Sales and Use Tax revenues are estimated to exceed appropriated revenues by $0.250 million, 2.2%, due to the moderate economic recovery underway.  The estimated total of $11.750 million is a $0.516 million, 4.59%, increase over FY04 actual collections.  The economic recovery is still fragile with significant monthly swings. 

·         Business License revenues are estimated to exceed appropriated revenues by $0.377 million, 5.1%, due to the moderate economic recovery.

·         Utility Tax revenues are estimated to exceed appropriated revenues by $0.421 million, 6.2%.  The increase is primarily due to greater than anticipated cellular and power company receipts offset by landline telephone receipts.  The cellular increases have begun to stabilize as the market becomes saturated.

·         Meals Tax revenues are estimated to exceed appropriated revenues by $0.150 million, 3.6%, due to the continued shift from home to convenience food preparation.

·         Other Local Tax revenues are estimated to be $0.822 million, (-9.5%), less than appropriated revenues.  The reduction is primarily due to a $0.563 million, 28.5%, decrease in public service tax revenues resulting from a lowered public service ratio calculated by the State Department of Taxation and a $0.085 million reduction in decal revenues due to fewer than anticipated registrations.

·         State revenues, including PPTR payments, are estimated to be $0.359 million, (-1.7%), less than appropriated revenues.  The decrease is due to reduced PPTR payments resulting from the same assessment issues discussed with personal property.

·         Federal revenues are estimated to exceed appropriated revenues by $0.337 million, 8.3%, due to the continued shift in funding of Social Services’ operations from State to Federal reimbursement.

·         Fund Balance appropriations are detailed on Attachment C.

 

2.       Expenditures:

Total expenditures, including transfers, are within appropriate levels, 24.1%, for the first quarter of the fiscal year.

·         Departmental expenditures are at 25.0% of the appropriated budget.

·         No attempt has been made to revise expenditure estimates based on the first quarter except for supplemental appropriations.

 

3.       Revised Revenues less Revised Expenditure Appropriations (yellow boxes in right hand corner):

·         Revised revenues less expenditures show a projected $0.236 million revenue increase by the end of this current fiscal year (June 30, 2005) based on the October revenue estimates.

·         Preliminary Fund Balance available November 3, 2004 is $3.755 million, which the Board approved holding in reserve at this point until more is known about the potential FY06 $8.0 million dollar shortfall in PPTR revenues from the state.

·         Preliminary Projected End-of-Year Available funds are $3.990 million, which reflects the revised FY05 revenue estimates and the FY04 carryover, which has been reduced by the supplemental appropriations approved for FY05 by the Board at the October 6th meeting.

 

 

B.                  Attachment B:  General Fund Budget Comparison Report:

This bar-chart report tracks changes in revenues and expenditures over time.

 

1.       Revenues:

 

·         Revenues from real estate tax, sales tax, business license fees, utility tax, meals tax, other local revenue, and federal revenue are anticipated to increase over last year and over the current appropriated budget.

·         Revenues from personal property tax, other local taxes, and state revenue are anticipated to be less than the current appropriated budget.

·         Use of fund balance is anticipated to exceed the current appropriated budget and transfers are anticipated to equal the appropriated budget.

 

2.       Expenditures:

 

·         This report displays minor increases for FY05 over FY04 in most functional areas.

 

 

     C.         Attachment C: Fund Balance Report:

                 This report indicates that the County:

 

·         Has a preliminary unaudited FY04 Fund Balance of $20.373 million, $0.117 million less than the $20.490 reported October 6, 2004;

·         Appropriated $2.920 million from the fund balance for budgeted FY05 projects which reduces the fund balance to $17.453 million as of September 30, 2004;

·         Has committed to maintain a minimum fund balance of $13.000 million for cash liquidity purposes.  The $13.000 million remains within the County’s financial policy of maintaining a fund balance equal to or no less than 8.0% of the County’s General Fund plus School Fund;

·         Appropriated $0.699 million for projects in October 2004; and

·         Has a remaining fund balance of $3.755 million.

 

 

D.         Fiscal Impact Discussion

 

Although estimated real estate revenues continue to show a slight increase over the budgeted amount, the offsetting $1.2 million dollar decrease in the estimated personal property tax collection, shows first-quarter projected revenues over budget by only $0.236 million. This is the smallest variance we have seen between the budgeted collection and the estimated collection the past several years.  For this reason, and the fact that the Unobligated Fund Balance has not changed significantly ($3.755 million to $3.990 million), staff continues to recommend that we continue to hold all of these funds in reserve.

 

RECOMMENDATIONS:

Staff recommends acceptance of the FY05 First Quarter Financial Report.

 

 

ATTACHMENTS

A – General Fund Quarterly Financial Report

B – General Fund Budget Comparison Report

C – Fund Balance Report

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