COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

FY09 First Quarter Financial Report

 

 

SUBJECT/PROPOSAL/REQUEST:

Presentation of the First Quarter Financial Report for the Three Months Ended September 30, 2008

 

 

STAFF CONTACT(S):

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

 

 

LEGAL REVIEW:   Yes

 

 

AGENDA DATE:

December 03, 2008

 

ACTION:                INFORMATION:   

 

CONSENT AGENDA:

  ACTION:              INFORMATION:    X

 

 

ATTACHMENTS:   Yes

 

 

REVIEWED BY:

 

 

BACKGROUND:

The attached Preliminary Financial Report provides information on the County’s General Fund operations and Fund Balance as of September 30, 2008.  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:

($ in Millions)

  1. Attachment A: General Fund Financial Report:
    1. Revenues:

The Department of Finance estimates that General Fund revenues, transfers, and use of fund balance

will be $7.254 million (3.2%) less than appropriations of $224.391 million.  Revenues will be revised in January after the second half 2008 property tax bills are due, the 2009 reassessment is completed, current market conditions become more apparent, and the Governor’s FY2010 Budget amendments are presented to the General Assembly.

 

The latest indicators show that the US and Virginia economies are struggling.  Nationally employment declined for the tenth consecutive month in October resulting in a national unemployment rate of 6.5 percent in October and 4.2 percent in Virginia.  The Conference Board’s national index of leading indicators fell in October to the lowest level on record back to 1969.  The Virginia Leading Index grew slightly in August, only the third increase in the last twelve months.  Auto registrations and building permits are significantly less than a year ago and initial claims for unemployment are much higher.  State revenues are now expected to decline 4.0% in fiscal year 2009.  Local governments are seriously impacted due to their reliance on decreasing property values: both real estate as well as personal property.

 

In light of current revenue performance, the Governor presented an official revision to the revenue estimates for fiscal year 2009 and 2010 on October 9, 2008.  This revision will result in significant state funding cuts for both fiscal years.

 

Following is a brief revenue analysis for the fiscal year:

·         Real Estate Tax revenues are estimated to be $1.340 million (1.2%) less than appropriations.  The Budget was prepared based on an estimated negative reassessment rate of 0.60%.  The 2009 reassessment rate is now estimated to be a negative 3.15%. 

 

·         Personal Property Tax revenues are estimated to be $1.556 million (6.8%) less than appropriations.  The decline is due to a 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 actual decreases in new vehicle unit sales from prior years. 

 

·         Sales Tax revenues are estimated to be $1.815 million (12.9%) less than appropriations.  Revenue projections were prepared anticipating the start of an economic recovery in mid FY09.  Unfortunately that has  not materialized.  Estimated collections will be less than FY08.  The Commonwealth as a whole has also experienced less than prior year collections attributed to current economic conditions.  Housing-related, grocery store, department store and restaurants were flat to negative compared to FY08.  Increased internet sales typically do not generate sales tax revenues.

 

·         Business License revenues are estimated to be $0.116 million (1.1%) less than appropriations.  Even with the weak economy, construction has taken place at the University. Business license revenues are based on prior year operations when the economy was somewhat stronger.

 

·         Utility Tax revenues are estimated to be $0.109 million ( 1.1%) less than appropriations.  The decline in the economy has resulted in reduced gas and electric power generation, thereby reducing associated utility tax revenues.

 

·         Food and Beverage Tax revenues are anticipated to exceed appropriations by $0.200 million (3.4%).  The increase demonstrates the continued shift from home to convenience food preparation.

 

·         Other Local Tax revenues are estimated to be $1.059 million (8.6%) less than appropriations.  The shortfall is primarily due to decreased audit revenues, vehicle license tax collections, recordation tax collections, and seller fees resulting from the vehicle and real estate market slowdowns which have been slightly offset by increased delinquent collection fees.

 

·         Other Local Revenues are estimated to be $1.283 million (20.8%) less than appropriations.  The decrease is primarily due to reduced DSS rent reimbursement, interest earnings, development fees, and excess Clerk fees resulting from the real estate and economic slowdown.

 

·         State Revenues are estimated to be $0.320 million (1.4%) less than appropriations.  The shortfall is due to less than anticipated Public Assistance and Compensation Board reimbursements.

 

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

 

    1. Expenditures:

The Office of Management and Budget estimates that total expenditures, including transfers, will be $7.256 million (3.2%) less than appropriations.  The reduction includes frozen positions, operational savings, and reduced transfers including schools and capital.

 

                                                               i.      Departmental expenditures are expected to total $79.889 million; a 2.6% savings or $2.094 million from Budget: 

·         Administration expenditures are expected to total $10.336 million; a savings of $0.747 million.

·         Judicial expenditures are expected to total $3.833 million; a savings of $0.033 million.

·         Public Safety expenditures are expected to total $28.974 million; a savings of $0.360 million.

·         Public Works expenditures are expected to total $4.443 million, a savings of $0.232 million.

·         Human Services expenditures are expected to total $18.590 million; a savings of $0.244 million.

·         Parks, Rec., and Culture expenditures total $6.238 million; a savings of $0.086 million.

·         Community Development expenditures total $7.475 million; a savings of $0.392 million.

 

                                                             ii.      Non-Department expenditures consisting of the revenue sharing payment, reserves, and refunds are expected to total $14.452 million; a 10.0% savings or $1.614 million from Budget.  The full $1.614 million results from the release of the lockbox to fund local government operations.

 

                                                            iii.      Transfers are expected to total $122.795 million; a 2.8% savings or $3.548 million from Budget:

·         Transfers to the School Division are expected to total $98.066 million, a 3.1% savings or $3.159 million.

·         Transfers to the Capital and Debt funds are expected to total $24.729 million; a 1.5% savings or $0.389 million.

 

    1. Revenues less Expenditures:

This report indicates that the FY will end with $0.002 million of revenues in excess of expenditures:

·         Revenues and transfers are projected to experience a $7.254 million shortfall which should be offset by $7.256 million in expenditure savings.

 

  1. Attachment B: General Fund Budget Comparison Report:

      The chart report tracks changes in revenues and expenditures over time.

                  Revenues:

·         Real Estate Tax, Personal Property Tax, Business Licenses, Utility Tax, Other Local Taxes and Federal Revenues show positive growth over last year. 

·         Sales Tax, Food and Beverage Tax, Other Local Revenue, State Revenues, Transfers, and Use of Fund Balance show decreases from last year.

 

                        Expenditures:

·         Public Safety, Human Services, Parks & Culture, Non-Departmental, and Education show increases over last year.

·         Administration, Judicial, Public Works, Community Development, and Non-School Transfers show decreases from last year.

 

  1. Attachment C: Fund Balance Report:

The report indicates that the County:

·         Has a Preliminary Audited FY08 Fund Balance of $20.440 million as of June 30, 2008,

·         Appropriated $0.412 million for FY09 projects,

·         Resulting in an estimated June 30, 2008 Fund Balance of $20.028 million,

·         Subsequently approved $1.386 million for FY09 projects, and

·         Has Projected Unobligated Funds of $18.642 million as of December 3, 2008.

 

  1. Budget Impact:

This report is based on preliminary (pre-audited) operations for FY08 and three months of financial data for FY09.  The financial information contained in the Second Quarter FY09 Financial Report to be presented to the Board in February 2009 will include audited figures for FY08 and six months of FY09 financial data.  Staff will utilize these figures as the basis for the FY10 Budget.

 

 

RECOMMENDATIONS:

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

 

ATTACHMENTS;

A – General Fund Quarterly Financial Report

B – General Fund Budget Comparison Report

C – General Fund Balance Report

Return to consent agenda

Return to regular agenda