COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

FY 08 Third Quarter Financial Report

 

 

SUBJECT/PROPOSAL/REQUEST:

Quarterly Financial Report for the Nine Months Ended March 31, 2008

 

 

STAFF CONTACT(S):

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

 

 

LEGAL REVIEW:   Yes

 

 

AGENDA DATE:

May 7, 2008

 

 

ACTION:                INFORMATION:   

 

CONSENT AGENDA:

  ACTION:              INFORMATION:  X

 

ATTACHMENTS:   Yes

 

 

 

REVIEWED BY:

 

 

 

BACKGROUND:

The attached Quarterly Financial Report provides information on the County’s General Fund operations and Fund Balance as of March 31, 2008.  The Financial Report includes a bar chart that compares fiscal year revenue and expenditure data with the prior year.

 

 

STRATEGIC PLAN:

Goal 5:  Develop a comprehensive funding strategy/plan to address the County’s growing needs.

 

 

DISCUSSION:

($ in Millions)

A.      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 $3.609 million (1.6%) less than current appropriations of $221.649 million.  Recent national indicators suggest that the economic outlook has weakened further.  Consumer confidence moved lower for the fourth straight month.  Consumers’ assessment of the present situation plunged almost ten points to its lowest level in five years.  Many economists now believe that we are in the midst of a recession.  State and local indicators recently edged up slightly giving mixed messages.  Final revenues may vary from estimates due to continued market uncertainty.

 

a.       Real Estate tax revenues are estimated to be $0.547 million (0.5%) less than appropriations.

The estimate is based on collections to date, the 2008 tax roll, and the Board-approved 2008 tax rate of $0.71.

 

b.       Personal Property tax revenues are estimated to be $0.930 million (4.4%) less than appropriations.

The reduction is due to decreased 2007 tax revenues resulting from 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 $0.339 million (35.0%) less than appropriations.

The decrease is being experienced both in real estate and personal property collections.  New delinquent fees are being implemented which should encourage timely payment of future tax bills.

 

d.       Sales tax revenues are estimated to be $1.350 million (9.2%) less than appropriations.

Actual collections are slightly less than FY07 for the same period.  Local audit procedures have commenced to ensure proper situs credit for dealer remittances.  The Commonwealth is also experiencing lower than anticipated collections across the state which are attributed to current economic conditions.

 

e.       Business License revenues are estimated to exceed appropriations by $0.806 million, 8.3%.  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 the prior year when market conditions were stronger.  The County is also experiencing increased contractor fees from UVA related construction.

 

f.         Utility tax revenues are estimated to exceed appropriations by $0.230 million, 2.5%.

The 2006 State Communications Sales and Use Tax Act mandated that Telecommunications Consumer Utility, E-911, and Right-of-Way tax receipts formerly collected directly by localities be gathered by the state and remitted back to localities based on a fixed FY06 apportionment formula.  These revenues were formerly recognized in 3 different funds.  They are all now credited to the General Fund.

 

g.       Other Local tax revenues are estimated to exceed appropriations by $0.128 million, 1.1%.

Increased Public Service, Bank Franchise, and Transient Occupancy taxes are offset by decreased Vehicle License and Clerk fees.  The Public Service boost is due to a higher public service ratio resulting from the minimal reassessment increase.  The decreased Vehicle License fees result from the reduction in vehicle unit purchases.  The decreased Clerk fees result from lower local seller’s tax and recordation receipts due to real estate market conditions.

 

h.       Other Local revenues are estimated to be $0.218 million (3.8%) less than appropriations.  Increased Court fees, Computer Maintenance recovery, and Traffic fines are offset by decreased Interest revenue and Inspection fees.

 

i.         State revenues are estimated to be $0.251 million (1.1%) less than appropriations.  The decrease is primarily attributed to reduced state reimbursement for Public Assistance and 599 funding of law enforcement.

 

j.         Federal revenues are estimated to be $1.160 million (21.1%) less than appropriations.  The decrease is due to reduced federal reimbursement for Public Assistance.  There is a related decrease in local expenditures.  Economically sensitive expenditures for food stamps, TANF, and Medicaid are administered by the state.

 

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

 

2.       Expenditures:

Total expenditures, including transfers, are within appropriate levels, 73.9%, for the first nine months. 

 

a.       Departmental expenditures are projected to be $2.319 million (2.8%) less than appropriations.

 

                                                   i.      Administration expenditures are projected to be $0.368 million, 3.3% less than appropriations, due to personnel-related reductions and software maintenance savings.

        

                                                 ii.      Public Safety expenditures are projected to be $0.124 million, 0.4%, less than appropriations, due to Hollymead fire station contingency reductions.

 

                                                iii.      Human Services expenditures are projected to be $1.311 million, 7.1%, less than appropriations due to Social Services personnel and operations savings.

 

                                                iv.      Community Development is projected to be $0.501 million, 5.6%, less than appropriations, due to personnel reductions and operations savings in Planning and Community Development.

 

b.       Non-Department expenditures are projected to be $0.679 million (4.6%) less than appropriations due to savings in the reclassification and merit reserves.

 

c.       Transfers are projected to be $1.266 million (1.0%) less than appropriations due to reduced transfer amounts to School Operating and School CIP, reflecting projected revenue shortfalls.

 

 

3.       Revised Revenues less Expenditures:

 

a.       Revenues are expected to exceed expenditures by $0.655 million.

 

b.       Fund Balance available May 07, 2008 is $2.820 million.

 

c.       Projected June 30, 2008 Available Funds is $3.475 million.

 

B.      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 Sales Tax, Federal Revenue, Transfers from Other Funds, and Fund Balance show positive growth from FY07.

 

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

 

C.      Attachment C – General Fund Balance Report:

The Report indicates that the County:

a.       Had 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 March 31, 2008,

d.       Reserved $13.000 million for cash flow purposes,

e.       Appropriated $0.065 million subsequent to March 31, 2008,

f.         Has Proposed commitments of $0.060 million, and

g.       Has Unobligated Funds Available of $2.820 million as of May 07, 2008.

 

 

BUDGET IMPACT:

This Financial Report is based on Audited financial data for FY07 and the first nine months of operations for FY08.

 

 

RECOMMENDATIONS:

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

 

 

ATTACHMENTS

A – General Fund Quarterly Financial Report

B – General Fund Balance Comparison Report

C – General Fund Balance Report

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