Please use this for all Executive Summaries

BACKGROUND:

The attached Quarterly Financial Report provides information on the County’s General Fund operations and Fund Balance as of December 31, 2007. The Financial Report includes a bar chart that compares fiscal year revenue and expenditure data with the prior year.

STRATEGIC PLAN:

Goal 5: Fund the County’s future needs

DISCUSSION:

($ in Millions)

Attachment A – General Fund Quarterly Financial Report:

1. Revenues:

The Department of Finance estimates that General Fund revenues, transfers, and use of fund balance will be $6.828 million (3.1%) less than appropriations of $221.634 million. Indicators suggest that the economic expansion will continue to slow as the housing and credit crunch remain influential. Final revenues may vary from estimates due to continued market uncertainty.

a. Real Estate tax revenues are estimated to be $3.317 million (3.0%) less than appropriations. The Budget was prepared prior to the impact of the housing crunch becoming known. It was based on an estimated 2008 reassessment rate of 5.0% and 2007 new construction of $668.328 million. The actual 2008 reassessment rate is 0.14% and 2007 new construction was $291.072 million.

b. Personal Property tax revenues are estimated to be $1.015 million (4.8%) less than appropriations. The decrease is attributed to a sales shift from high dollar fuel inefficient to lower dollar fuel efficient vehicles, average used vehicle sale prices falling faster than prior year comparable vehicle sales, and an actual decrease in new vehicle unit sales from prior years.

c. Delinquent Property tax revenues are estimated to be $0.284 million (29.4%) less than appropriations. The decrease is being experienced in both real estate and personal property collections.

d. Sales tax revenues are estimated to be $1.100 million (7.5%) less than appropriations. Actual collections for July through November are slightly less than FY07 for the same period. Indicators for December sales tax revenues to be received in February point to continued reduced collections reflecting the weakening of the national and state economies. The impact of the rapid increase in gift card sales is unknown at this time.

e. Business License revenues are estimated to exceed appropriation by $0.467 million (4.8%). Business licenses are based on prior calendar year gross receipts. Due to the one year lag in recognition, the County is now realizing an increase in license fees from when market conditions were stronger.

f. Other Local tax revenues are estimated to be $0.128 million (1.1%) less than appropriations. The decrease is primarily attributed to decreased local recordation and seller tax collections related to the housing and credit crunch.

g. Federal revenues are estimated to be $1.336 million (24.4%) less than appropriations. The decrease is primarily attributed to decreased federal reimbursement for public assistance. There will be a related decrease in local expenditures. Economically sensitive expenditures for food stamps, TANF, and Medicaid are administered by the state.

h. Other categories are estimated to vary less than $0.100 million from appropriations.

2. Expenditures:

Total expenditures, including transfers, are within appropriate levels, 44.3%, for the first six months.

a. Departmental expenditures are estimated to be $2.223 million (2.7%) less than appropriations. The decrease is primarily attributed to decreased public assistance expenses. Additional estimated departmental expenditure reductions are due to the elimination of 3 positions, freezing of 14 vacant positions, and reduced total rewards funding.

b. Non-departmental expenditures are estimated to be $0.100 million (0.7%) less than appropriations. The decrease is due to an anticipated reduction in reserve and other County-wide spending.

c. Transfers are estimated to be $3.482 million (2.8%) less than appropriations.

The decrease is due to a:

i. $3.001 million reduction in the School Division transfer resulting from reduced local tax collections; and

ii. $0.482 adjustment in debt service resulting from a prior year adjustment.

3. Revised Revenues less Expenditures:

a. Revenues are projected to be $1.021 million less than estimate expenditures.

b. Fund Balance available February 06, 2008 is $1.254 million. This is after an estimated $1.690 million transfer to the CIP fund based on expenditure savings in FY07.

c. Projected End-of-Year Available Funds is $0.232 million. It is important to note that these figures are assuming the savings from the frozen/deleted positions and decreased public assistance expenses only. Staff is aggressively pursuing additional saving opportunities and is confident that, by the end of FY08, actual revenues will exceed expenditures.

Attachment B – General Fund Budget Comparison Report:

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

a. Revenues in all categories except Federal, Transfers, and Use of Fund Balance show positive growth over FY07.

b. Expenditures in all categories except Non-School Transfers are expected to increase over FY07.

Attachment C – General Fund Balance Report:

The report indicates that the County:

a. Has an audited FY07 Fund Balance of $18.314 million at June 30, 2007,

b. Appropriated $2.370 million for FY08 projects,

c. Has remaining FY07 Fund Balance of $15.944 million at December 31, 2007,

d. Reserved $13.000 million for cash flow purposes,

e. Has a Preliminary $1.690 million CIP transfer commitment, and

f. Has Unobligated Funds Available of $1.254 million at February 06, 2008.

BUDGET IMPACT:

This Financial Report is based on audited financial data for FY07 and the first six months of operations for FY08. Staff will utilize this data as the basis for the FY09 Budget.

It is important to remember that any change in the County’s real estate tax rate will impact both the FY08 and FY09 real estate tax revenues. Staff estimates that each one cent increase in the 2008 real estate tax rate will increase FY08 revenues by $788,149 (including real estate, public service, and mobile homes) and FY09 revenues by $1,608,235 (including 2008 new construction).

RECOMMENDATIONS:

This Financial Report has been prepared for your information. No action is required.