CITY OF CHARLOTTESVILLE, VIRGINIA CITY COUNCIL AGENDA Agenda Date: January 19, 2021 Action Required: Report to Council Presenter: John Blair, Acting City Manager Ryan Davidson, Senior Budget and Management Analyst Staff Contacts: Ryan Davidson, Senior Budget and Management Analyst Title: City Financial Snapshot Report for December 2020 Actuals Background: Through discussions with the City Council, the City Manager has arranged to provide periodic financial reports. These reports will be provided on a monthly basis, at the second regular Council meeting of each month. Discussion: The attached report provides a financial snapshot of the General Fund revenues and expenditures, as well as the revenues and expenditures for the Utility Funds (Gas, Water, Wastewater, and Stormwater). Alignment with City Council’s Vision and Strategic Plan: The project supports City Council’s “Smart, Citizen-Focused Government” vision. It contributes to Goal 5 of the Strategic Plan, be a Well-Managed and Responsive Organization, and objective 5.1, to integrate effective business practices and strong fiscal policies. Community Engagement: This report is designed to provide the City Council and the community information in the form of a snapshot report on the City General Fund and Utility Fund finances through December 31, 2020. Budgetary Impact: This report has no direct budget change impact on the General Fund. This is only a report of the revenues that have been collected and the funding expended through December 31, 2020. Recommendation: Review of Report Alternatives: N/A Attachments: Council Financial Snapshot Report for F.Y. 2021 through December 31, 2020 City of Charlottesville Revenue Scenarios for FY 2021 Budget (Revised January 2021) Adopted Year to Date September 2020 $ Change January 2021 $ Change Further Downturn $ Change 2020-2021 Actuals (as of Forecast (from Adopted FY Forecast (from Adopted FY 2020-2021 (from Adopted 12-31-2020) 21 to September 21 to January FY 21 to Forecast) Forecast) Downturn FY21) Real Estate Taxes $ 78,353,270 $ 38,404,095 $ 78,175,000 ($178,270) $ 78,075,000 ($278,270) $ 77,853,270 ($500,000) City /County Rev enue Sharing $ 14,589,313 $ - $ 14,589,313 $0 $ 14,589,313 $0 $ 14,589,313 $0 Meals Tax $ 14,295,064 $ 5,138,228 $ 12,288,232 ($2,006,832) $ 10,144,598 ($4,150,466) $ 9,490,753 ($4,804,311) Sales & Use Tax $ 11,504,331 $ 5,619,190 $ 11,800,000 $295,669 $ 11,395,481 ($108,850) $ 10,806,075 ($698,256) Personal Property Tax $ 9,800,000 $ 4,387,154 $ 9,600,000 ($200,000) $ 9,550,000 ($250,000) $ 9,400,000 ($400,000) Transient Room Tax $ 6,282,721 $ 1,861,735 $ 4,420,000 ($1,862,721) $ 3,298,223 ($2,984,498) $ 3,206,189 ($3,076,532) Business & Prof essional Licenses $ 6,225,000 $ 281,063 $ 6,225,000 $0 $ 6,225,000 $0 $ 6,000,000 ($225,000) Pay ment in Lieu of Taxes: Utilities $ 6,091,667 $ - $ 6,091,667 $0 $ 6,091,667 $0 $ 6,091,667 $0 Utility Taxes $ 5,024,112 $ 2,087,448 $ 5,024,112 $0 $ 4,300,000 ($724,112) $ 4,100,000 ($924,112) Recreation Income $ 1,335,824 $ 188,514 $ 685,824 ($650,000) $ 635,060 ($700,764) $ 355,060 ($980,764) Transf er f rom Parking Enterprise Fund $ 1,200,000 $ - $ 650,000 ($550,000) $ 400,000 ($800,000) $ 100,000 ($1,100,000) Other Local Taxes Subtotal $ 7,241,431 $ 3,643,990 $ 7,219,749 ($21,682) $ 7,210,249 ($31,182) $ 7,067,249 ($174,182) Other Licenses and Permits Subtotal $ 1,975,500 $ 1,083,098 $ 2,175,500 $200,000 $ 2,420,500 $445,000 $ 2,275,000 $299,500 Other Intergov ernmental Rev enue Subtotal $ 12,984,420 $ 8,068,185 $ 12,984,420 $0 $ 13,158,609 $174,189 $ 13,143,609 $159,189 Other Charges f or Serv ice Subtotal $ 5,596,604 $ 2,171,625 $ 5,596,604 $0 $ 5,196,604 ($400,000) $ 4,950,754 ($645,850) Other Miscellaneous Rev enue Subtotal $ 1,563,956 $ 882,983 $ 1,637,956 $74,000 $ 1,612,956 $49,000 $ 1,612,956 $49,000 Transf ers f rom Other Funds Subtotal $ 250,000 $ - $ 250,000 $0 $ 250,000 $0 $ 250,000 $0 Other Designated Rev enue $ 6,882,660 $ 6,640,607 $ 6,851,910 ($30,750) $ 6,685,079 ($197,581) $ 6,685,079 ($197,581) GENERAL FUND BUDGET TOTAL $ 191,195,873 $ 80,457,916 $ 186,265,287 ($4,930,586) $ 181,238,338 ($9,957,535) $ 177,976,973 ($13,218,900) Total Amount Change from Original Adopted September 2020 $186,265,287 ($4,930,586) January 2021 $181,238,338 ($9,957,535) Further Downturn $177,976,973 ($13,218,900) 1 1/15/2021 General Fund Revenue Summary Narrative for January 2021 Forecast column Real Estate Tax revenue was slightly reduced from the original projection and September Forecast based upon the collection rate experienced for the December 2020 deadline, which was off by about 1.2%. This reduction isn’t lost revenue, but the expectation is that all revenue may not materialize in the current fiscal due to slower payment rates. Meals Tax revenue projections for FY21 Meals Tax were based upon projected recovery rates that exceeded the current rate of recovery. The Meals Tax revenue was continuing to improve through the beginning of FY21, but saw a sharp decline in revenue for the December payments, and it still is not increasing at the projected rate in the original revenue projections or the revised September Forecast. Revised recovery rate projections project a slower recovery and do not anticipate returning to 100% of previous years collections until the after the beginning of FY22. A portion of this revenue, 1 cent or 1/6 of the total collected is dedicated to pay for debt service. The decrease in this designated portion ($761,805) will result in a corresponding expenditure decrease of the same amount in the Transfer to Debt Service. Sales Tax initially performed better than anticipated for the beginning of FY21. However recent trends show a decrease in collections which has resulted in a recovery rate for the reminder of the fiscal year that is approximately 6% per month lower than was projected as part of the revised September Forecast. Personal Property Tax based upon revised book values and the collection rate from the December 2020 deadline, this revenue projection has been reduced by $250,000 from the original Adopted FY21 budget. Lodging Tax revenue projections for FY21 Lodging Tax were based upon projected recovery rates that exceeded the current rate of recovery. The occupancy rate and overall Lodging Tax revenue was continuing to improve through the beginning of FY21, but saw a sharp decline in revenue for the December payments, and it still is not increasing at the projected rate in the original or September revenue projections. Revised recovery rate projections anticipate an even slower recovery rate and do not anticipate returning to even 60% of previous years collections until after the beginning of FY22. Utility Tax revenue has continued to lag behind initial revenue projections that we are continuing to monitor. The impacts of COVID, UVA’s modified school year and mild weather conditions continue to still be a factor in the performance of this revenue and it is now not anticipated to reach the original projections for FY21. Parks and Recreation Revenue is projected to see a decrease of approximately $700,000 due to continued closure of facilities, as well as not offering the usual recreation class and instructional opportunities. 1 General Fund Revenue Summary Narrative for January 2021 Forecast column Parking Revenue is now projecting an $800,000 decrease in the transfer from the Parking Fund, due to decreased revenue generation in the City owned parking facilities based upon decreased usage. Other Licenses and Permits ‐ the increase in projected revenue is due to continued strong performance in Building an Other Permit revenue. Other Intergovernmental Revenue ‐ the increase is due to slight increases in a some of the revenue sources that are received from the State. Other Charges for Services ‐ the decrease in the projections for Other Charges for Services Revenue can be explained by a decrease in the amount of Court Revenue projected as well as a decrease in the projected revenue from Reimbursable Public Safety Overtime, which should also show a corresponding decrease in expenditures. Other Designated Revenue ‐ the decrease in the projections for Other Designated Revenue can be explained by a decrease in the transfer to the CIP for Mall Vendor Fees, which will have a corresponding expenditure decrease for that project; and due to a decrease in the Pupil Transportation revenue that was to come from bus rentals and field trip revenue. 2 December General Fund Expenditure Summary Fiscal Year 2020‐21 Actuals through December 31st ‐ Period 6 of 12 or 50% of fiscal year. FY21 YTD Actual and FY21 Remaining Available FY21 Original FY21 Current Encumbrances Annual Budget % of FY21 Major Expenditure Categories Budget Budget (through December 31st) (through December 31st) Budget Utilized Contribution to City Schools $ 58,709,623 $ 58,709,623 $ 28,917,312 $ 29,792,311 49.25% Police Department $ 18,017,555 $ 18,254,682 $ 8,325,406 $ 9,929,275 45.61% Outside and Nonprofit Agencies $ 16,798,273 $ 17,040,773 $ 9,983,805 $ 7,056,968 58.59% Fire Department $ 12,539,795 $ 12,658,000 $ 6,815,502 $ 5,842,498 53.84% Public Works $ 12,531,690 $ 12,817,180 $ 5,778,432 $ 7,038,748 45.08% Parks and Recreation $ 11,535,820 $ 11,728,454 $ 4,352,619 $ 7,375,836 37.11% Debt Service $ 11,013,359 $ 11,013,359 $ 10,251,554 $ 761,805 93.08% Interfund Transfers $ 10,638,085 $ 14,648,995 $ 10,247,244 $ 4,401,751 69.95% Citywide Reserve $ 250,000 $ 1,238,730 $ 226,175 $ 1,012,555 18.26% Citywide Reserve ‐ COVID Economic Downturn $ 6,674,971 $ 6,674,971 $ ‐ $ 6,674,971 0.00% Tax and Rent Relief Programs $ 1,895,000 $ 1,895,000 $ 1,358,406 $ 536,594 71.68% Internal and Financial Services $ 9,458,988 $ 9,495,351 $ 4,786,746 $ 4,708,605 50.41% School Contractual Services ‐ Pupil Transportation/Building Maintenance $ 6,788,910 $ 6,800,332 $ 2,970,686 $ 3,829,646 43.68% Management $ 5,493,231 $ 6,277,993 $ 3,029,861 $ 3,248,131 48.26% Public Safety and Justice $ 3,705,176 $ 3,978,943 $ 1,741,462 $ 2,237,481 43.77% Healthy Families and Community $ 2,650,095 $ 2,847,118 $ 1,273,030 $ 1,574,089 44.71% Non Departmental Activities $ 2,495,302 $ 2,841,872 $ 439,342 $ 2,402,530 15.46% Total $ 191,195,873.00 $ 198,921,376.09 $ 100,497,582.89 $ 98,423,793.20 50.52% Notes: Current Budget includes the Original FY21 Adopted Budget as well as FY20 carryovers. December Expenditure Summary ‐ FY21 Contribution to City Schools Police Department Outside and Nonprofit Agencies Fire Department Public Works Parks and Recreation Debt Service Interfund Transfers Citywide Reserve Citywide Reserve ‐ COVID Economic Downturn Tax and Rent Relief Programs Internal and Financial Services School Contractual Services ‐ Pupil Transportation/Building Maintenance Management Public Safety and Justice Healthy Families and Community Non Departmental Activities $‐ $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 FY21 Current Budget FY21 YTD Actual and Encumbrances (through December 31st) December General Fund Expenditure Summary Narrative (Actuals through December 31, 2020) Outside and Nonprofit Agencies includes payments to all Vibrant Community fund Agencies, Arts and Culture Agencies, Contractual Agencies including JAUNT and JMRL, and all Organizational Memberships and Agency dues. Actuals to date are above 50% due to reflecting a third quarterly payments for several outside human service agencies. Debt Service represents the General Fund transfer to the Debt Service Fund. The actuals contain the General Fund contribution to the City's annual debt service of $8,560,788, and the portion of the Meals Tax revenue, 1 cent or 1/6 of the total collected, that is dedicated to pay for debt service. This portion of the transfer is now showing a reduction of $761,805, due to the decrease in Meals Tax revenue projections. The designated Meals Tax portion of this revenue will be adjusted at the end of the fiscal year based upon the actual revenue that is collected. Interfund Transfers contains all General Fund transfers to other funds including transfer to Transit, Transfer to Social Services and Human Services, Transfer to Capital Improvement Program, Transfer to Facilities Repair Fund, and Transfer to CSA. These transfers and payments are typically made as one time payments, and many are made at either the end of the second quarter or beginning of the third quarter and are adjusted at the end of the fiscal year. Internal and Financial Services includes the General Fund portions of Finance and Information Technology, and the Office of the City Treasurer, Commissioner of Revenue's Office, and Human Resources. Citywide Reserve includes $250,000 for performance agreements, and $988,730 in other reserve funding some of which is previously appropriated and designated for specific purposes. Citywide Reserve ‐ COVID Economic Downturn includes $6.67M in COVID downturn reserve funding that was originally the cash transfer to the CIP from the General Fund. Rent and Tax Relief includes all rent and tax relief programs for the City including the Charlottesville Housing Affordability Tax Grant Program (CHAP). Actuals to date include approximately half of the Real Estate Tax Relief program allocations for FY21, and all of the CHAP program and Rent Relief program allocations for FY21. Management includes City Council, Council Strategic Initiatives, City Manager's Office, Redevelopment and Housing, Economic Development, Communications, City Attorney, and the Office of the General Registrar. 1 December General Fund Expenditure Summary Narrative (Actuals through December 31, 2020) Public Safety and Justice includes the operations for Circuit Court, General District Court, Juvenile and Domestic Relations Court, Commonwealth Attorney, and City Sheriff. Healthy Families and Community includes Neighborhood Development Services and Office of Human Rights. Non Departmental Activities include Citizen Engagement, Police Civilian Review Board, Participatory Budgeting, Strategic Planning, Employee Compensation and Training, and grant matches for the Food Equity Program and Virginia Juvenile Community Crime Control Act. 2 Utility Fund Revenue and Expenditure Summary Fiscal Year 2020‐21 Actuals through December 31st ‐ Period 6 of 12 or 50% of fiscal year. FY21 YTD Actual and FY21 Remaining Available FY21 Original FY21 Current Encumbrances Annual Budget % of FY21 Gas Fund Budget Budget (through December 31st) (through December 31st) Budget Utilized Gas Fund Revenue $ 27,081,999 $ 27,081,999 $ 7,771,390 $ 19,310,609 28.70% Gas Fund Expenditures $ 27,873,698 $ 29,434,341 $ 10,653,940 $ 17,219,758 38.22% FY21 YTD Actual and FY21 Remaining Available FY21 Original FY21 Current Encumbrances Annual Budget % of FY21 Water Fund Budget Budget (through December 31st) (through December 31st) Budget Utilized Water Fund Revenue $ 18,279,490 $ 18,279,490 $ 7,153,091 $ 11,126,399 39.13% Water Fund Expenditures $ 17,272,327 $ 18,166,205 $ 7,676,644 $ 9,595,683 44.44% FY21 YTD Actual and FY21 Remaining Available FY21 Original FY21 Current Encumbrances Annual Budget % of FY21 Wastewater Fund Budget Budget (through December 31st) (through December 31st) Budget Utilized Wastewater Fund Revenue $ 17,451,758 $ 17,451,758 $ 11,197,589 $ 6,254,169 64.16% Wastewater Fund Expenditures $ 17,203,764 $ 17,880,005 $ 10,307,953 $ 6,895,811 59.92% FY21 YTD Actual and FY21 Remaining Available FY21 Original FY21 Current Encumbrances Annual Budget % of FY21 Stormwater Fund Budget Budget (through December 31st) (through December 31st) Budget Utilized Stormwater Fund Revenue $ 2,894,572 $ 2,894,572 $ 3,061,374 $ (166,802) 105.76% Stormwater Fund Expenditures $ 2,794,572 $ 2,834,286 $ 2,664,539 $ 130,033 95.35% Notes: Current Budget includes the Original FY21 Adopted Budget as well as FY20 carryovers December Gas Utility Summary ‐ FY21 Gas Fund Revenue Gas Fund Expenditures $‐ $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 FY21 Current Budget FY21 YTD Actual and Encumbrances (through December 31st) December Water Utility Summary ‐ FY21 Water Fund Revenue Water Fund Expenditures $‐ $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 FY21 Current Budget FY21 YTD Actual and Encumbrances (through December 31st) December Wastewater Utility Summary ‐ FY21 Wastewater Fund Revenue Wastewater Fund Expenditures $‐ $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 FY21 Current Budget FY21 YTD Actual and Encumbrances (through December 31st) December Stormwater Utility Summary ‐ FY21 Stormwater Fund Revenue Stormwater Fund Expenditures $‐ $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 FY21 Current Budget FY21 YTD Actual and Encumbrances (through December 31st)