EXECUTIVE SUMMARY





Quarterly Financial Report




Presentation of the Year to Date Quarterly Financial Report for the Nine Months Ended March 31st.




Messrs. Tucker, Breeden, Walters; Ms. White


AGENDA DATE:                      

May 5, 2004


ACTION:      X                            INFORMATION:    



 ACTION:                                  INFORMATION:  








The attached Quarterly Financial Report provides information on the county’s general fund as of March 31, 2004.

Also included is a bar chart that compares current revenue and expenditure data with data from the previous year.




($ in millions)

A.         Attachment A: General Fund Quarterly Financial Report:

1.                   Revenues: 

The Department of Finance estimates that current year General Fund revenues, not counting other fund transfers or fund balance appropriations, will exceed the July 1, 2003 appropriated budget by $3.841 million, 2.69%.  This is an increase of $0.341 million from the December 31, 2003 Quarterly Financial Report.    Based on year-to-date collections, minor increases are anticipated in most revenue categories.  The amount of increase over the December 2003 projection is provided with each comment below.


·                     Real Estate Tax revenues are estimated to exceed budgeted revenues by $1.783 million.  The increase is primarily due to the final 18.7% January 1, 2003 reassessment rate and additional new construction, both of which substantially exceeded the preliminary rates used for budget preparation.  (+$105,000)


·                     Personal Property Tax revenues, exclusive of PPTR, are estimated to exceed budget by $0.377 million due to new vehicle sales, stabilizing used vehicle values, and a slight increase in business equipment purchases.  (+$34,000)


·                     Sales Tax revenues are estimated to exceed budget by $0.500 million due to the moderate economic recovery that appears to be taking hold.  (+$50,000)


·                     Utility Tax revenues are estimated to exceed budget by $0.237 million due to a greater than anticipated increase in cellular receipts offset by a slight decrease in power company receipts.  Landline telephone receipts should be relatively stable. (+$36,000)


·                     Other Local Taxes are estimated to exceed budget by $0.334 primarily due to the active real estate market resulting in greater than anticipated recordation and seller tax receipts.  (+$38,000)


·                     Other Local Revenues are estimated to be $0.161 less than budget primarily due to continued weakness in the investment yield market.  (+$12,000)


·                     State revenues, inclusive of PPTR, and Federal revenues are estimated to exceed budget by $0.667 primarily due to greater than anticipated PPTR and Social Services reimbursements. (+$8,000)


·                     Use of Fund Balance is estimated to exceed budget by $2.562 million due to additional appropriations as detailed in the Fund Balance Report, attachment C.


·                     Use of Other Funds is estimated to be $0.133 less than budget due to anticipated reduced E911 transfers.


2.                   Expenditures:

Total expenditures, including transfers, are within appropriate levels (75.3%) for the first nine months of the fiscal year.  


·                   Departmental expenditures are at 70.6% of current budget.


·                   No attempt has been made to revise expenditure estimates based on the first nine months of the fiscal year except for supplemental appropriations, which have been approved by the Board.


3.         Revised Revenues less Revised Expenditures (yellow boxes in right hand corner):


·                   Revised revenues less expenditures show a projected $3.695 million savings by the end of this current fiscal year (June 30, 2004) based on the April revised revenue estimates and supplemental appropriations. This is a net $0.340 million increase since the December Quarterly Financial Report due to increased current year revenues.


·                   Available Fund Balance is $0.081 million that reflects the FY03 carryover reduced by approved supplemental appropriations.  



B.         Attachment B:  Annual Budget Comparison Report:

This bar-chart-based report tracks changes in revenue and expenditure changes over time:


1.            Revenues:

·         Revenues from real estate property taxes are anticipated to increase over both last year and the July 1, 2003 Appropriated Budget.


·         The local share of personal property taxes is anticipated to increase over both last year and the current year budget. This reflects only the 30% share with the other 70% shown as part of the PPRT revenues in the state revenue category.


·         Revenues from sales taxes, utility taxes, meal taxes and other local taxes and revenues are also anticipated to increase over both last year and the current year budget.


·         State revenues show an increase over both last year and the current year budget.


·         Federal revenues remain fairly level compared to last year and the current year budget.


2.                   Expenditures:

This report shows minor increases in FY04 over FY03 in all functional areas.  Transfers to the School Division show an increase over last year.



C.         Attachment C: Fund Balance Report:

            This report indicates that the County:


1.       Has an audited FY03 balance of $16.773 million;


2.       Appropriated $3.692 million from the fund balance for budgeted FY04 projects and supplemental items, which reduce the fund balance as of March 31st to $13.081 million.  All approved appropriations are listed on Attachment C. 


3.       Has committed to maintain a minimum fund balance of $13.000 million for cash liquidity purposes. The $13.000 million remains within the County’s financial policy of maintaining a fund balance “equal to or no less than 8% of the County’s General Fund plus School Fund.”


4.       Remaining fund balance is $0.081 million.   


D.                  Fiscal Impact Discussion


1.       Current Year Revenue Estimates are based on April 19, 2004 Department of Finance revised estimates, which look at FY03 actual revenue collections, as well as any trends from current year collections.  Economic related revenues, i.e. sales, meals, transient, continue to show improvement and both real estate and personal property tax collections should exceed budget.  


2.       This revised revenue estimate for FY04 has increased by $487,000 since the budget preparation primarily due to increased projection of real estate tax.


3.       Based on the adopted FY05 budget, $2.199 million of the FY04 $3.776 million projected unobligated fund balance is used to fund FY05 expenditures.  This will reduce the unobligated fund balance to $1.657 million.


Projected FY04 Unobligated Fund Balance                       $ 3,776,000


Less use of Fund Balance:

            County Executive Recommended Budget       453,918

            New initiatives approved by Board                           1,015,449

            ACE Program approved by Board                              650,000


Remaining Projected Unobligated Fund Balance               $ 1,656,633


4.       In September 2001 the Board approved a carry-over policy that would allocate 100% of unbudgeted revenue (minus the amount of Fund Balance used in the upcoming budget year) and 60% of departmental expenditure savings (savings after all encumbered amounts are reappropriated) to the Fund Balance to meet required cash flow needs with any remaining funds to be allocated to the CIP Reserve for future capital needs or debt service.  The remaining 40% of expenditure savings could be used for other projects at the Board’s discretion.


5.       We have also discovered that the National Automobile Dealers Association (NADA) has made a change in the methodology they use for determining used car values which may substantially reduce the loan values used for tax year 2004 personal property tax assessments.  This change will have an impact on most Virginia localities.  This change was a consideration in the revenue projections for FY05 however the total impact will be difficult to determine until the June 2004 tax bills are processed.




Staff recommends acceptance of the March Quarterly Financial Report for FY04.


Go to Attachment A
Go to Attachment B
Go to Attachment C

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