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OFFICE OF THE ALBANY CITY TREASURER DATE: May 3, 2018 TO: Hon. Kathy M. Sheehan Members of the Common Council FROM: Hon. Darius Shahinfar CC: Rachel McEneny, Mike Wheeler RE: 1st quarter 2018 Performance The following is a summary of the unaudited results for the 1st Quarter 2018. Fiscal performance was stable and within budgetary expectations for 2018, with the exception of expenditures related to the overtime, utilities and contracted services. Revenue in the first quarter of 2018 totaled $84.4 million which was a little over $9.6M more than the same period last year at this time (most of this increase is related to billing the State for the first part of the 2018 19a funds in March compared to receiving it in June last year). Expenses totaled almost $33.8M which was a decrease of 0.1% or under ($46,000) compared to the first quarter of 2017. REVENUE (Thousands) MAR MAR % MAR Annual % REVENUE YTD 18 YTD 17 Variance YTD 18 Budget Variance Budget PROPERTY TAX 58,541 57,709 832 1% 58,541 58,250 291 100% SALES/USE TAX 8,351 7,966 385 5% 8,351 33,607 (25,256) 25% PILOTS/19-a 11,028 2,475 8,553 346% 11,028 21,075 (10,047) 52% OTHER LOCAL SOURCES 464 652 (188) -29% 464 3,086 (2,622) 15% LANDFILL 1,123 1,715 (592) -35% 1,123 6,002 (4,879) 19% OTHER DEPARTMENTS 1,916 425 1,491 351% 1,916 5,807 (3,891) 33% INTER GOVERNMENT 71 43 28 65% 71 107 (36) 66% FINES 1,264 1,295 (31) 1,264 5,271 (4,007) 24% LICENSES AND PERMITS 1,129 1,060 69 7% 1,129 3,708 (2,579) 30% STATE AID 0 0 0 100% 0 29,383 (29,383) 0% SALE P/COMP/LOSS 0 7 -100% 0 996 (996) 0% MISCELLANEOUS 546 1,426 (880) -62% 546 7,980 (7,434) 7% OTHER 13 11 2 18% 13 1,519 (1,506) 1% TOTAL REVENUE 84,446 74,784 9,662 13% 84,446 176,791 (92,345) 48% ---PAGE BREAK--- 2 The chart above summarizes the City’s sources of revenue through March 31, 2018. 1. Property Tax revenue increased by $832K from last year as result of the slight increase in the tax rate and the expansion of the tax base, and is over budget at the end of the first quarter as a result of paying a small number of assessment reductions by the end of the quarter. 2. Sales Tax revenue the first quarter sales tax revenue was higher than last year at $8.3M and on budget at 25% for the year in first quarter. 3. PILOTS/19-a revenue was higher than the same period last year. Most of the increase is due to the City timing of billing for PILOTS on the new ERP system. The largest was over $7.0M for the 19a properties billed to NYS. 4. Other Local sources revenue decreased from the first quarter of 2017. The difference from year to year is related to receiving the Time Warner Franchise in the first quarter last year. 5. Landfill revenue decreased 35% compared to the same period last year. Tipping fees decreased by almost $550K from commercial customers and coupon sales decrease by $67K. Revenue is also below budget for the year at 19%. 6. Other Departmental revenue was 351% ($1.5M) higher than last year at this time. Difference was the result of billing the 2018 waste collection fees were in March this year. Last year they were not billed until April. Rental registries increased by $40K and EMS Ambulatory revenue increased by $84K. APD Event Security revenue decreased by almost $52K. 7. Fines and Forfeitures revenue decreased by 2% from last year. The decrease was the result the timing of Red Light Camera fine payments to the contractor. 8. Licenses and Permits revenue increased 7% ($69K) compared to the same period last year. Safety Inspection permits revenue increased by $132K, street opening revenue increased by $90K and parking permit revenue increased by $20K. While stabilizations and demolition fees decreased by $70K and taxi medallion revenue decreased by $67K. 9. State aid – There was no revenue received by the end of the first quarter in 2018. Most of this revenue is derived from state grants and various state payments. The timing of these payments varies from year to year. ---PAGE BREAK--- 3 10. Miscellaneous revenue decreased 62% ($880K) compared to the same time last year. This category is made up of refund of prior year expenses, special events revenue and reimbursements from ACDA. 11. Other revenue increased by $2K compared to the same period last year. Most of this revenue is derived from federal government grants and the timing of these payments varies from one year to the next. DISBURSEMENTS Category/Account MAR MAR % Annual % YTD 18 YTD 17 Variance Budget Variance Budget Personal Benefits 18,552,289 18,468,826 83,463 0.5% 75,263,892 (56,711,603) 25% Fringe Benefits 11,023,817 11,224,865 (201,048) -1.8% 50,858,134 (39,834,317) 22% Non-Personal Service 4,213,305 4,141,508 71,796 1.7% 50,669,488 (46,456,183) 8% Total 33,789,410 33,835,199 (45,789) -0.1% 176,791,514 (143,002,104) 19% Number of weeks in period 13 13 0 52 25% Total disbursements decreased by over $45K or 0.1% compared to the same period last year. Spending was down Fringe Benefits and up in Personnel Benefits and Non-Personal Services compared in the first quarter. 1. Salary expense increased by 0.5% compared to the same period last year. The Police department was up by $55K from last year and the Maintenance of Streets department increased by $106K. The Fire department decreased by $148K. This category also includes overtime expenses which ended the quarter $121K higher than in 2017 (due in part to the snowstorms). Most of the other City departments were at similar levels or had lower salary expenses for the quarter. 2. Benefits Expenses decreased by 1.8% from the first quarter of last year. This category was below budget for the first quarter at 22%. Most of the decrease in this category was attributable to decreases in workers compensation lines ($86K) and retirement expenses from NYS which ---PAGE BREAK--- 4 were down ($237K). Retiree and employee health insurance lines increased ($172K). 3. Non-Personal Service spending increased by 1.7% or almost $72K. Not including encumbrances this category was only 8% of budget by the end of the first quarter. This category includes utilities, contracted services, supplies, materials, small equipment, consulting fees and debt service. The first quarter saw increases over last year in the following areas. Utilities expenses increased $162K, gasoline expense $11K, motor vehicles expense $56K and contracted services increased $219K. BRC saw demolitions expense decrease $265K and debt service was lower by $184K. 4. Encumbrances (funds reserved for purchases) decreased by almost $1.0M compared to the same period last year. Encumbrances total more than $5.4M at the end of the first quarter. OVERTIME % of Department 2018 2017 Change % 2018 Budget Budget Police (non-reimbursable) 1,036,492 995,794 40,698 4% 1,036,492 4,078,500 25% Fire 152,307 167,685 (15,378) 152,307 439,000 35% Communications 71,453 52,547 18,906 36% 71,453 175,000 41% Parks Maintenance 72,557 67,131 5,426 8% 72,557 185,000 39% Waste Collection 67,238 63,816 3,422 5% 67,238 175,000 38% Landfill 61,676 56,434 5,242 9% 61,676 150,000 41% Central Maint. 18,249 11,672 6,577 56% 18,249 70,000 26% Street Maintenance 166,234 108,554 57,680 53% 166,234 270,000 62% Recreation 319 614 (295) -48% 319 12,000 3% Traffic Engineering 8,919 10,684 (1,765) -17% 8,919 40,000 22% Capital Hills 5,298 7,687 (2,389) -31% 5,298 26,000 20% Fleet Maintenance 15,123 15,712 (589) 15,123 18,000 84% Bleeker Stadium 0 0 0 0% 0 500 0% Buildings 24,679 20,287 4,392 22% 24,679 50,000 49% DGS Administration 320 453 (133) -29% 320 2,500 13% Control of Animals 2,733 2,128 605 28% 2,733 9,000 30% Cultural Affairs 146 1,085 (939) -87% 146 15,000 1% General Fund 1,703,743 1,582,283 121,460 8% 1,703,743 5,715,500 30% Police (reimbursable) 261,046 241,126 19,920 8% 261,046 1,240,500 21% Traffic Eng. (reimbursable) 0 0 0 0% 0 500 0% Water 160,385 142,557 17,828 13% 160,385 490,000 33% Totals 2,125,174 1,965,966 159,208 8% 2,125,174 7,446,500 29% General Fund overtime was over budget (29%) at the end of the first quarter. Excluding the Water Department (for which the City is reimbursed) and ---PAGE BREAK--- 5 reimbursable Police overtime, overtime expense was 8% ($121K) higher than the same period last year. The Street Maintenance department had the biggest increase in overtime payments which were up by almost $58K. Much of this was related to the additional work related to snow removal. The Fire department decreased by over $15K and posted its lowest 1Q OT since 2012, but ended the quarter at 35%. OT, as expected, was reduced as new recruits filled staffing gaps. The majority of departments have higher overtime expenses this year than last year. CASH The City’s cash position was 7% lower than forecasted and $3.5.M lower than the same period last year. Most of the decrease is the result of the County of Albany receiving the corporate tax payments directly instead of the City collecting this cash and reimbursing the County at a later date. CONCLUSION The City saw an increase in overall revenue in the first quarter compared to 2017, because of the timing of the 19a billing. Expenses were down in the first quarter of 2018 compared to last year at this time, mostly as the result of decreases in retirement costs, worker’s compensation expenses, demolition expenses and debt service expenses. ---PAGE BREAK--- 6 Thus far, there are no major surprises for 2018 other than the 3 snow emergencies, and the City is largely moving forward as expected financially. The City will have to continue to watch expenses closely and try to control them as much as possible, while continuing to push for revenue increases where it can locally, and at the State level where a permanent solution for the revenue gap caused by tax exempt properties remains the goal.