COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

FY07 End-of-Year Preliminary Financial Report

 

 

SUBJECT/PROPOSAL/REQUEST:

Presentation of the Preliminary Financial Report for the Fiscal Year Ended June 30, 2007

 

 

STAFF CONTACT(S):

Messrs. Tucker, Foley, Davis, Wiggans, Breeden, and Walters

 

 

LEGAL REVIEW:   Yes

 

AGENDA DATE:

October 3, 2007

 

     ACTION:                              INFORMATION:   

 

CONSENT AGENDA:

     ACTION:   X                      INFORMATION:   

 

 

ATTACHMENTS:       Yes

 

 

REVIEWED BY:

 

 


 

BACKGROUND:

The attached Preliminary Financial Report provides information on the County’s General Fund operations and Fund Balance as of June 30, 2007.  The financial report includes a bar chart that compares current fiscal year revenue and expenditure data with data from the previous fiscal year.

 

STRATEGIC PLAN:

Goal 5: Fund the County’s future needs.

 

DISCUSSION:

  1. Attachment A: General Fund Financial Report:

a. Revenues:

   Revenues, excluding Transfers and Fund Balance Appropriations, total $195.803 million, $1.437 million, or 0.7%, less than revised appropriations (hereinafter “Budget”).  Combined with the use of $2.139 million in transfers from other funds and $9.690 million in fund balance, Revenues, Transfers, and Use of Fund Balance total $207.632 million, $2.257 million, or 1.1%, less than Budget.  Following is a brief revenue analysis for the fiscal year:

·            Real Estate Tax revenues total $97.239 million, $3.721 million, or 3.7%, less than Budget.  The shortfall is due to the reduction of the real estate tax rate from $0.74 to $0.68 for tax year 2007.

·            Personal Property Tax revenues, exclusive of PPTR, total $16.810 million, $0.203 million, or 1.2%, more than Budget.  The excess is due to the revised PPTR allocation rate resulting in increased collections.

·            Sales Tax revenues total $13.426 million, $0.374 million, or 2.7%, less than Budget.  Statewide taxable sales for April through June have declined 0.6% compared to the prior year due to the economic slowdown currently being experienced throughout the Commonwealth.  The state has reduced its official FY08 forecast from an increase of 5.2% to 2.8%.

·            Business License revenues total $10.078 million, $0.956 million, or 10.5%, more than Budget.  Revenues are based on prior year operations when the economy was stronger.

·            Food and Beverage Tax revenues total $5.438 million, $0.288 million, or 5.6%, more than Budget. The excess is due to the continued strength of the convenience food preparation industry.

·            Other Local Tax revenues total $10.363 million, $0.964 million, or 10.3%, more than Budget.  The excess is due to increased Bank Franchise tax revenues resulting from additional bank branches located in the County, audit activities, and vehicle registration fees.

·            Other Local Revenues total $5.798 million, $0.849 million, or 17.2%, more than Budget.  The excess is primarily due to increased traffic fines, interest earnings, and police and sheriff fees, offset by reduced inspection related revenues.

·            State Revenues total $23.393 million, $0.129 million, or 0.5%, less than Budget.  The shortfall is primarily due to decreased PPTR funding offset by additional state funded positions for Constitutional Officers.

·            Federal Revenues total $4.627 million, $0.405 million, or 8.1%, less than Budget.  The shortfall is due to less than anticipated public assistance reimbursements.

·            Use of Other Funds total $2.139 million, $0.820 million, or 27.7%, less than Budget.  The shortfall is due to the new Telecommunications law which became effective January 1, 2007.  E911 revenues previously received separately are now reported as Communications Sales and Use Tax combined with former Consumer Utility Tax revenues on landline and wireless communication services.  The tax is now assessed by the state on cable services formerly untaxed by the County.  This tax is now collected by the state and allocated back to localities based on fixed FY06 locality revenues.  The change negatively impacted FY07 revenues. 

·            Categories with variances of less than $0.100 million have not been analyzed for this report.

b. Expenditures:

   Expenditures, including transfers, total $204.789 million, a $5.099 million, or 2.4%, savings from Budget.

·            Departmental expenditures total $71.768 million, a $3.624 million, or 4.8%, savings from Budget.  After proposed reappropriations of $1.985 million for uncompleted projects and outstanding purchase orders, the net savings is $1.639 million, 2.2%.

·            The Transfer to the School Division is 100% of Budget.

·            Non-departmental expenditures total $10.317 million, a $1.455 million, or 12.4%, savings from Budget.  This reflects savings in Contingency Reserve expenditures of $1.491 million.

·            Transfers to the Capital and Debt Service funds total $31.538 million, a $0.020 million savings from Budget.

c. Revenues less Expenditures:

   This report indicates that there will be $2.842 million in unexpended revenues, transfers, and use of fund balance at the end of the fiscal year.  The $2.842 million is comprised of:

·            Revenues and transfers experiencing a $2.257 million shortfall.

·            $5.099 million in expenditure savings.

 

  1. Attachment B: General Fund Budget Comparison Report:

The chart report tracks changes in revenues and expenditures.

·            Revenues in all categories except Other Local Taxes and State Revenue increased over last year.  Both decreases approximate $0.100 million.

·            Expenditures in all categories increased over last year.

 

  1. Attachment C: Fund Balance Report:

The report indicates that the County:

·            Has an Audited FY06 Fund Balance of $25.079 million as of June 30, 2006,

·            Appropriated $9.690 million for FY07 projects,

·            Has a remaining FY07 Fund Balance of $15.388 million as of June 30, 2007,

·            Estimates Preliminary Revenues in Excess of Expenditures of $2.842 million,

·            Reserved $13.000 million for cash flow purposes,

·            Approved $0.347 million for FY08 projects,

·            Has Proposed Commitments of $3.675 million, and

·            Has Projected Unobligated Funds of $1.209 million as of October 3, 2007.

 

  1. Discussion of FY07 Unobligated Balance:

The Board’s approved policy allocates 100% of surplus revenues and 60% of departmental expenditure savings (after all current year committed amounts from fund balance are appropriated) to the CIP Fund for future capital needs, capital repairs and maintenance items, and/or debt service.  The policy further states that the remaining 40% of expenditure savings may be used for other projects at the Board’s discretion and approval.  The policy was developed to establish guidelines for the use of end-of-year excess revenues and expenditure savings.

 

There are no surplus revenues for FY07.  The Preliminary CIP transfer will be calculated based on 60% of expenditure savings determined as follows:

 

            Expenditures Savings                                                                             $5.099 

            Less Budgeted Initiatives and Proposed Reappropriated

             Purchase Orders and Uncompleted Projects                                 2.282

            Net Expenditure Savings                                                                           2.817

 

            60% expenditure CIP transfer allocation                                                   $1.690

 

            This is a Preliminary estimate that will be finalized when the fiscal year audit is completed.

 

RECOMMENDATIONS:

Staff recommends 1) Acceptance of the Preliminary June 30, 2007 End-of-Year Financial Report; and 2) Approval of the CIP transfer pending final audited financial results of operations.

 

ATTACHMENTS;

A – General Fund Preliminary General Fund Financial Report

B – General Fund Preliminary General Fund Budget Comparison Report

C – General Fund Preliminary General Fund Balance Report

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