COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

FY05 Second Quarter Financial Report

 

SUBJECT/PROPOSAL/REQUEST:

Presentation of the Year-To-Date Quarterly Financial Report for the Six Months Ended December 31, 2004

 

STAFF CONTACT(S):

Messrs. Tucker, Davis, Wiggans, Breeden, Walters

Ms. White

 

 

LEGAL REVIEW:   Yes

 

AGENDA DATE:

February 2, 2005

 

ACTION:                             INFORMATION:   X

 

CONSENT AGENDA:

  ACTION:                            INFORMATION:   

 

 

ATTACHMENTS:      Yes

 

 

REVIEWED BY:

 

 

 

BACKGROUND:

The attached Quarterly Financial Report provides information of the County’s General Fund and Fund Balance as of December 31, 2004.  The financial report includes a bar-chart report the 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 original appropriated revenues by $3.544 million, 2.2%, which is approximately $3.308 million dollars greater than what was anticipated for the year in the Fist Quarter Report.   The majority of this increase reflects the revised real estate reassessment rate, plus approximately $1.268 in other revenue increases described below.  Combined with the use of   $3.728 million in fund balance, the total projected revenues for the year are anticipated to be $167.120 million or $7.272 million (4.5%) over the original budget of $159.848 million.

 

·         Real Estate Tax revenues are estimated to exceed original appropriations by $2.276 million, 3.0%, which is a $2.032 million improvement over the prior October estimate.  The increase is primarily due to the final 2005 reassessment rate of 27.2% unadjusted for land use.  The original budget was prepared based on an estimated 15.0% rate and the October revision was based on a subsequent estimate of 17.5%.

·         Personal Property Tax revenues,  not Personal Property Tax Relief (PPTR) payments, are estimated to be $0.116 million, 0.9%, less than the original appropriation, but  a $0.284 million improvement over the October   estimate.  The improvement appears to be due to taxpayers replacing older vehicles with newer higher valued vehicles.

·         Sales and Use Tax revenues are estimated to exceed original appropriations by $0.275 million, 2.4%, which is a $0.025 million improvement over the October estimate.  This improvement may be due to the economic recovery underway, although the recovery seems somewhat fragile with significant monthly swings.

·         Business License revenues are estimated to exceed original appropriations by $0.468 million, 6.3%, which is a $0.091 million improvement over the October estimate.  The improvement is attributed to the economic recovery.

·         Utility Tax revenues are estimated to exceed original appropriations by $0.522 million, 7.7%, which is a $0.101 million improvement over the October estimate.  The increase is primarily due to greater than anticipated cellular and power company receipts offset by a decrease in landline receipts.  Cellular increases have begun to stabilize as the market matures.

·         Meals Tax revenues are estimated to exceed original appropriations by $0.260 million, 6.3%., which is a $0.110 million improvement over the October estimate.  The increase is attributed to the continued shift from home to convenience food preparation.

·         Other Local Tax revenues are estimated to be $0.500 million, 5.8%, less than original appropriations, although this is a $0.322 million improvement over the October estimate.  The improvement is primarily due to increased recordation and seller tax receipts generated by the strong real estate market.

·         Other Local Revenues are estimated to be $0.074 million, 1.7%, less than original appropriations, which is primarily due to decreased court revenues.

·         State revenues, including PPTR payments, are estimated to exceed original appropriations by only $0.013 million, 0.1%, although this is a $0.372 million improvement over the October estimate...  The improvement is primarily due to increased PPTR payments, rental vehicle receipts, and social service expenditure reimbursements.

·         Federal revenues are estimated to exceed original appropriations by $0.421 million, 10.3%, which is a $0.084 million improvement over the October estimate.  The improvement is due to additional social service expenditure reimbursements.

·         The Use of Fund Balance revenues are detailed on Attachment C.

 

2.       Expenditures:

Total expenditures, including transfers, are within suitable levels at 47.1% of the original appropriated budget.

·         Departmental expenditures are at 46.8% of original appropriations.

·         The contingency reserve remains at $0.254 million.

·         No attempt has been made to revise expenditure estimates based on the second 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 $3.489 million savings by the end of this fiscal year (June 30, 2005) based on the January revenue update.

·         Fund Balance available February 2, 2005 is $0.373 million based on the Board’s approval on January 19th to transfer $3.000 million in FY04 year end revenues to the Capital Improvement Reserve based on adopted Board policy.

·         Projected End-of-Year Available Funds are $3.863 million which reflects the updated FY05 revenue estimates and the FY04 fund balance reduced by supplemental FY05 approved appropriations and the transfer of $3.000 million in end-of-the-year FY04 revenues to the Capital Improvement Program.

 

 

B.                  Attachment B:  General Fund Budget Comparison Report:

The bar-chart report tracts changes in revenue and expenditure changes over time.

1.       Revenues:

·         Revenues from real estate tax, sales tax, business license fees, utility tax, meals tax, state receipts, and federal receipts are anticipated to increase over last year and over the current year.

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

·         Use of fund balance is anticipated to exceed the original 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 an audited FY04 Fund Balance of $20.101 million, $0.271 less than the preliminary $20.373 million reported November 3, 2004;

·         Appropriated $3.728 million from the fund balance for budgeted FY05 projects which reduces the fund balance to $16.373 million as of December 31, 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; and

·         Had a remaining fund balance of $0.373 million after the transfer of $3.000 million in end-of-the-year revenues to the Capital Improvement Fund according to Board policy. The transfer of these revenues had previously been frozen by the Board until there was more information on the PPTR funding issue from the state.  Since the PPTR issue seems to have been resolved with no immediate impact on the County’s finances, staff recommended to the Board at the January 19th Business Plan work session that these funds be transferred into the Capital Improvement Program. 

 

 

D.                  Fiscal Impact Discussion:

 

This report is based on estimated revenues for the year based on six months of actual data, which projects end of the year available revenues of $3.489 million or a 2% variance over budget.  Fortunately, the increased real estate reassessment rate, along with higher than budgeted increases in sales tax, business licenses and utility taxes will provide additional revenues in the current year, since personal property and other local taxes continue to be projected below budgeted estimates.   

 

These net anticipated available revenues for FY05 can be considered by the Board during budget worksessions for identified one-time needs, capital expenditures, or based on the Board’s approved carry-over policy could be transferred into the Capital Improvement Program Reserve to be used in subsequent budget years for needed capital projects.

 

It is important to remember that if the Board approves a reduction in the 2005 Calendar Year Tax Rate during budget worksessions, the end of the year projected revenues would decrease by approximately $0.500 million per penny, due to the reduced June 2005 collection.  

 

 

 

RECOMMENDATIONS:

Staff recommends acceptance of the FY05 Second Quarter Financial Report.

 

 

ATTACHMENTS

A - General Fund Quarterly Financial Report

B - General Fund Budget Comparison Report

C - Fund Balance Report

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