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OFFICE OF THE ALBANY CITY TREASURER DATE: May 16, 2016 TO: Hon. Kathy M. Sheehan Members of the Common Council FROM: Hon. Darius Shahinfar CC: Rachel McEneny RE: 1st quarter 2016 Performance The following is a summary of the unaudited results for the 1st Quarter 2016. Revenue in the first quarter of 2016 totaled $74.7 million which was almost $550K more than the same period last year at this time. Expenses totaled over $32.9 million and decreased almost 3.1%, a little over ($1.0 million) compared to the first quarter of 2015. REVENUE (Thousands) MAR MAR % MAR Annual % REVENUE YTD 16 YTD 15 Variance YTD 16 Budget Variance Budget PROPERTY TAX 56,826 56,771 55 0% 56,826 56,528 298 101% SALES/USE TAX 7,991 7,890 101 1% 7,991 33,304 (25,313) 24% PILOTS/19-a 2,694 3,770 (1,076) -29% 2,694 20,470 (17,776) 13% OTHER LOCAL SOURCES 317 448 (131) -29% 317 3,193 (2,876) 10% LANDFILL 2,914 2,124 790 37% 2,914 9,793 (6,879) 30% OTHER DEPARTMENTS 570 407 163 40% 570 6,048 (5,478) 9% INTER GOVERNMENT 46 57 (11) -19% 46 245 (199) 19% FINES 1,192 933 259 28% 1,192 7,068 (5,876) 17% LICENSES AND PERMITS 652 556 96 17% 652 3,359 (2,707) 19% STATE AID 24 0 24 100% 24 29,367 (29,343) 0% SALE P/COMP/LOSS 42 48 -13% 42 394 (352) 11% MISCELLANEOUS 1,420 1,141 279 24% 1,420 9,208 (7,788) 15% OTHER 6 2 4 200% 6 2,150 (2,144) 0% TOTAL REVENUE 74,694 74,147 547 1% 74,694 181,127 (106,433) 41% The chart above summarizes the City’s sources of revenue through March 31, 2016. ---PAGE BREAK--- 2 1. Property Tax revenue higher than last year by $55,000 and over budget at the end of the first quarter as a result of not paying any assessment reductions by the end of the quarter. 2. Sales Tax revenue the first quarter sales tax revenue increased 1% and totaled $7.9 million which was $101,000 higher compared to last year at the same time although we are below budget at 24% for the first quarter. 3. PILOTS/19-a revenue was 29% less than the same period last year because of the timing of payments. Most of the decrease is due to the City not receiving voluntary PILOT payments during the first quarter, but which will be forthcoming 4. Other Local sources revenue was 29% lower than the first quarter of 2015. Utilities gross receipts decreased by $35,000 and interest fees on late property taxes were down by $100,000 as a result of the waiver of February interest penalties. 5. Landfill revenue increased 37% compared to the first quarter of 2015. Tipping fees increased by almost $627,000 from commercial and municipal customers resulting from increased spot market fees, rather than lower, large volume fees, which is simultaneously increasing revenue while decreasing waste inflow. Contaminated soil and methane gas sales combined for an increase of $209,000. 6. Other Departmental revenue was 40% higher than the same period last year. Most of the increase was the result of the new waste collection fees $81,000, rental registries were up $42,000, APD Event Security revenue increased by almost $37,000 and EMS Ambulatory revenue increased by $33,000. 7. Fines and Forfeitures revenue increased by 28% from the first quarter of 2015. Both parking ticket fines and surcharges combined for an increase of $213,000. 8. Licenses and Permits revenue increased 17% ($96,000) compared to the same period last year. Safety Inspection permit revenue increased by $24,000, vacant building fees increased by $4,000, parking permit revenue increased by $24,000, street opening revenue increased by $114,000 while plumbing permits decreased by $29,000 and taxi medallion revenue decreased by $22,000. ---PAGE BREAK--- 3 9. State aid in the first quarter was at $24,000. Most of this revenue is derived from state grants and various state payments. The timing of these payments varies from year to year. 10. Miscellaneous revenue increased 24% ($279,000) compared to the same period last year primarily from recycling revenue which totaled almost $247,000. This was a new revenue source started in 2015 and there was no revenue for the first quarter last year. 11. Other revenue increased by $4,000 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 16 YTD 15 Variance Budget Variance Budget Personal Benefits 7100-7199 18,013,043 17,564,128 448,915 2.6% 75,514,577 (57,501,534) 24% Fringe Benefits 7801-7863 10,878,361 11,402,767 (524,406) -4.6% 54,989,593 (44,111,232) 20% Non-Personal Service 7210-7701 3,998,126 4,986,755 (988,629) -19.8% 50,623,010 (46,624,884) 8% Total 32,889,530 33,953,650 (1,064,120) -3.1% 181,127,180 (148,237,650) 18% Number of weeks in period 13 13 0 52 25% Total disbursements decreased by $1.0 million or 3.1% compared to the same period last year. Spending was down in Fringe Benefits and Non- Personal Service but increased in Personal Benefits compared to 2015. 1. Salary expense increased by 2.6% compared to the same period last year. The Police department salary expense increased by over $239K and the Fire department was up by $411K from last year. The Maintenance of Streets department increased by $246K which was related to the consolidation of Street Cleaning department into this department. This category also includes overtime expenses which ended the quarter $56K higher than in 2015. Most of the other City departments were level or had lower salary expenses for the quarter. ---PAGE BREAK--- 4 2. Benefits Expenses decreased by 4.6% for the first quarter of 2016. Most of the decrease in this category is attributable to the Police department which decreased by over $434K from the same time last year. The largest decrease was in the workers compensation lines in the Police department which decreased by over $424,000. 3. Non-Personal Service spending decreased by 19.8% or just over $988,000. This category includes utilities, contracted services, supplies, materials, small equipment, consulting fees and debt service. The first quarter saw decreases over last year in the following areas. DGS saw decreases in the following accounts, mostly due to the milder winter: gasoline expense decreased $140,000, motor vehicle repair expense decreased $126,000 and snow removal supplies and expense decreased $479,000. Debt service was lower by $375,000 which was related to paying off the capital lease in 2015. 5. Encumbrances (funds reserved for purchases) increased by almost $0.5 million or almost 8% compared to the same period last year. Encumbrances total $6.3 million at the end of the first quarter. ---PAGE BREAK--- 5 OVERTIME % of Department 2016 2015 Change % 2016 Budget Budget Police (non- reimbursable) 940,240 755,596 184,644 24% 940,240 4,050,000 23% Fire 287,267 357,004 (69,737) -20% 287,267 439,000 65% Communications 42,311 26,820 15,491 58% 42,311 175,000 24% Parks Maintenance 26,511 60,630 (34,119) -56% 26,511 200,000 13% Waste Collection 42,909 73,643 (30,734) -42% 42,909 175,000 25% Landfill 37,827 69,018 (31,191) -45% 37,827 151,000 25% Central Maint. 7,722 17,620 (9,898) -56% 7,722 70,000 11% Street Maintenance 41,909 45,104 (3,195) 41,909 300,000 14% Street Cleaning 0 62,915 (62,915) -100% 0 0 0% Recreation 1,816 2,792 (976) -35% 1,816 12,000 15% Traffic Engineering 8,758 8,105 653 8% 8,758 45,000 19% Capital Hills 1,472 6,324 (4,852) -77% 1,472 26,000 6% Central Garage 1,545 8,002 (6,457) -81% 1,545 28,000 6% Bleeker Stadium 0 0 0 0% 0 600 0% Buildings 14,033 11,253 2,780 25% 14,033 50,000 28% DGS Administration 0 0 0 0% 0 5,000 0% Control of Animals 928 1,592 (664) -42% 928 9,000 10% Special Events 1,662 382 1,280 335% 1,662 15,000 11% General Fund 1,456,910 1,506,800 (49,890) 1,456,910 5,750,600 25% Police (reimbursable) 249,424 205,759 43,665 21% 249,424 1,192,658 21% Traffic Eng. (reimbursable) 0 0 0 0% 0 0 100% Water 168,144 175,958 (7,814) 168,144 580,000 29% Totals 1,874,478 1,888,517 (14,039) 1,874,478 7,523,258 25% General Fund overtime was at 25% of budget at the end of the first quarter. Excluding the Water Department (for which the City is reimbursed) and reimbursable Police overtime, overtime expense was 3% ($49,890) lower than the same period last year. The Police department had the biggest increase in overtime payments which were up by almost $185K. The Fire department decreased by over $69K and posted its lowest 1Q OT since 2012, but ended the quarter at 65% of budget as a result of decreasing their budget by $311,000 from 2015. Much of the OT is due ---PAGE BREAK--- 6 to the training of new recruits, and $25k is reimbursable. OT is expected to be reduced going forward as new recruits fill staffing gaps. The majority of departments have lower overtime expenses this year than last year. CONCLUSION It is a positive sign that many smaller efforts to increase revenue are being successfully implemented (parking tickets, landfill, recycling, licenses, permits, fees and other departmental revenue). However, although revenue is up $550k from last year, and expenses were controlled in the first quarter (3.1% or over $1.0 million lower than last year at this time, and only 18% of 2016 budgeted expenses), these savings and/or revenue increases are not necessarily expected to last or continue. The City will have to continue to find other savings and revenue sources in order to offset the additional decrease to the fund balance related to increases in salaries and associated expenses, as well as other expected revenue declines and cost increases.