COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

FY09 Third Quarter Financial Report

 

 

SUBJECT/PROPOSAL/REQUEST:

Presentation of the Third Quarter Financial Report for the Nine Months Ended March 31, 2009

 

 

STAFF CONTACT(S):

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

 

 

LEGAL REVIEW:  

 

 

AGENDA DATE:

May 06, 2009

 

ACTION:                INFORMATION:   X

 

CONSENT AGENDA:

  ACTION:              INFORMATION:    

 

 

ATTACHMENTS:   Yes

 

 

REVIEWED BY:

 

 

BACKGROUND:

The attached Third Quarter Financial Report provides information on the County’s General Fund operations and Fund Balance as of March 31, 2009.  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 $7.609 million (3.4%) less than appropriations of $225.967 million; a decrease of $2.112 million from the previous estimate presented with the FY09 Second Quarter Financial Report.  The decrease is a result of the on-going economic downturn.

 

The latest indicators show that the US and Virginia economies are continuing to struggle.  Most current indicators are at recession levels, with some at historical lows.  Tight consumer and corporate credit, a flagging labor market, and a slowing global economy continue to be a drag on growth.  In Virginia, payroll employment fell by 2.2 percent in February.  The Virginia unemployment rate rose from 6.4 percent to 7.0 percent in February; 8.5 percent nationally.  The Virginia Leading Index fell 0.1 percent in February; the sixth consecutive monthly decline.  All three components – auto registrations, building permits, and initial unemployment claims – contributed to the decline.  The leading index fell in eight of the eleven metro areas.  On a year-to-date basis, total Virginia revenue collections have declined 6.8 percent, slightly ahead of the revised annual forecast of a 7.3 percent decline.  Many economists expect the economic recovery and positive growth to return late this year.

 

Following is a brief revenue analysis for the FY09 fiscal year:

·         Real Estate Tax revenues are estimated to be $1.250 million (1.1%) greater than appropriations; a $0.053 million improvement from the previous projection.  The increase beyond the amount appropriated is due to the adoption of a 3.2 cent tax rate increase for calendar year 2009 that will increase the amount of tax revenue to be collected in the last half of FY 09. 

 

·         Personal Property Tax revenues are estimated to be $1.552 million (6.6%) less than appropriations; a $0.470 million decrease from the previous projection.  Assessments for 2009 have significantly dropped due to market conditions, particularly for large vehicles.

 

·         Delinquent Property Taxes are estimated to be $0.313 million (36.6%) greater than appropriations; a $0.083 million increase from the previous projection.  New delinquent fees have resulted in improved collections.

 

·         Sales Tax revenues are estimated to be $2.140 million (15.2%) less than appropriations; a $0.275 million decrease from the previous projection.  Revenue projections were prepared anticipating the start of an economic recovery in mid FY09.  Unfortunately, that has not materialized.  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.

 

·         Business License, BPOL, revenues are estimated to be $1.165 million (11.0%) less than appropriations; a $0.554 million decrease from the previous projection.  BPOL revenues typically lag behind current revenues and are significantly affected by the recession.

 

·         Utility Tax revenues are estimated to be $0.631 million (6.6%) less than appropriations; a $0.163 million decrease from the previous projection.  Overall mild weather for the first six months of the fiscal year, combined with reduced consumption by businesses due to current economic conditions, has generated less tax revenue.

 

·         Food and Beverage Tax revenues are estimated to be $0.600 million (10.3%) less than appropriations; a $0.550 million decrease from the previous projection.  Reduced discretionary spending has resulted in more meals being prepared and eaten at home.

 

·         Other Local Tax revenues are estimated to be $0.895 million (7.3%) less than appropriations; a $0.026 million decrease from the previous projection.  Public Service revenues and local Clerk of the Court fees, particularly recordation, have significantly declined due to the recession.

 

·         Other Local Revenues are estimated to be $2.036 million (32.3%) less than appropriations; a $0.234 million decrease from the previous projection.  The decrease is primarily due to reduced interest earnings, development fees, agency leases, and other Clerk fees.

 

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

 

    1. Expenditures:

The Division of Management and Budget estimates that total expenditures, including transfers, will be $8.684 million (3.8%) less than appropriations.  The reduction includes release of the 2008 tax year lockbox, frozen positions, operational savings, and reduced transfers including schools and capital.

 

                                                               i.      Departmental expenditures are expected to total $79.677 million; a 4.5% savings of $3.746 million from Budget: 

·         Administration expenditures are expected to total $10.536 million; a savings of $0.732 million.

·         Judicial expenditures are expected to total $3.667 million; a savings of $0.217 million.

·         Public Safety expenditures are expected to total $28.677 million; a savings of $0.782 million.

·         Public Works expenditures are expected to total $4.937 million, a savings of $0.348 million.

·         Human Services expenditures total $17.924 million; a savings of $0.937 million.

·         Parks, Rec., and Culture expenditures total $6.172 million; a savings of $0.214 million.

·         Community Development expenditures total $7.764 million; a savings of $0.516 million.

 

                                                             ii.      Non-Department expenditures consisting of the revenue sharing payment, reserves, and refunds are expected to total $14.574 million; a 10.0% savings of $1.627 million from Budget.  The lockbox release to fund local government operations generates $1.614 million.

 

                                                            iii.      Transfers are expected to total $123.032 million; a 2.6% savings of $3.311 million from Budget:

·         Transfers to the School Division are expected to total $98.305 million, a 2.9% savings of $2.920

million.

·         Transfers to the Capital and Debt funds are expected to total $24.727 million; a 1.6% savings of $0.391 million.

 

    1. Revenues less Expenditures:

This report indicates that the FY will end with $1.075 million of revenues in excess of expenditures:

·         Revenues and transfers are projected to experience a $7.609 million shortfall which should be offset by $8.684 million in expenditure savings and reductions. 

 

  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, and Other Local Taxes show positive growth over FY08. 

·         Sales Tax, Business Licenses, Utility Taxes, Food and Beverage Tax, Other Local Revenue, State Revenues, Federal Revenues, Transfers, and Use of Fund Balance show decreases from FY08.

 

                        Expenditures:

·         Public Safety, Public Works, Human Services, Parks & Culture, Non-Departmental, and Education show increases over FY08.

·         Administration, Judicial, and Community Development are flat compared to FY08.

·         Non-School Transfers show a decrease from FY08.

 

  1. Attachment C: Fund Balance Report:

The report indicates that the County:

·         Had an Audited FY08 Fund Balance of $20.440 million as of June 30, 2008,

·         Appropriated $1.816 million for FY09 projects,

·         Resulting in a remaining June 30, 2008 Fund Balance of $18.623 million,

·         Subsequently has not approved any FY09 projects, and

·         Has Projected FY08 Unobligated Funds of $18.623 million as of May 06, 2009.

 

  1. Budget Impact:

This Financial Report is based on audited FY08 financial data and the first nine months of financial data for FY09. 

 

 

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

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