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OFFICE OF THE ALBANY CITY TREASURER DATE: July 3, 2019 TO: Hon. Kathy M. Sheehan Members of the Common Council FROM: Hon. Darius Shahinfar CC: Rachel McEneny, Mike Wheeler RE: 1st quarter 2019 Performance The following is a summary of the unaudited results for the 1st Quarter 2019. Overall, fiscal performance was stable and within budgetary expectations for 2019, with the exception of expenditures related to the overtime. Revenue in the first quarter of 2019 totaled almost $85.5 million which was a decrease of 2.0% or $1.4M from last year at this time (most of this decrease is related to not billing the waste collection fees by the first quarter this year compared to last year). Expenses totaled almost $34.4M which was an increase of 1.9% or ($625,000) compared to the first quarter of 2018. REVENUE (Thousands) MAR MAR % MAR Annual % REVENUE YTD 19 YTD 18 Variance YTD 19 Budget Variance Budget PROPERTY TAX 58,560 58,451 109 0% 58,560 58,250 310 101% SALES/USE TAX 8,486 8,351 135 2% 8,486 34,594 (26,108) 25% PILOTS/19-a 11,585 11,028 557 5% 11,585 19,675 (8,090) 59% OTHER LOCAL SOURCES 421 465 (44) 421 3,092 (2,671) 14% LANDFILL 1,900 1,123 777 69% 1,900 6,030 (4,130) 32% OTHER DEPARTMENTS 632 1,929 (1,297) -67% 632 6,948 (6,316) 9% INTER GOVERNMENT 130 76 54 71% 130 532 (402) 24% FINES 1,205 1,261 (56) 1,205 5,291 (4,086) 23% LICENSES AND PERMITS 828 1,151 (323) -28% 828 3,665 (2,837) 23% STATE AID 19 1 18 1800% 19 29,184 (29,165) 0% SALE P/COMP/LOSS 877 0 [PHONE REDACTED]% 877 359 518 244% MISCELLANEOUS 805 3,039 (2,234) -74% 805 8,647 (7,842) 9% OTHER 14 12 2 17% 14 1,205 (1,191) 1% TOTAL REVENUE 85,462 86,887 (1,425) 85,462 177,472 (92,010) 48% The chart above summarizes the City’s sources of revenue through March 31, 2019. ---PAGE BREAK--- 2 1. Property Tax revenue increased by $109K from last year 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 and totaled almost $8.5M and on budget at 25% for the year in first quarter. This is actually a positive sign, as first quarter numbers are usually below 25%, indicating the possibility of another over-budget year. 3. PILOTS/19-a revenue was higher than the same period last year. Most of the increase is due to the contracted increases in PILOT payments and earlier shelter rent payments. The largest payment was over $7.0M for the 19a properties billed to NYS. 4. Other Local sources revenue decreased from the first quarter of 2018. The difference from year to year is related to timing of receiving the February OTB receipts in the first quarter last year. Penalties on property taxes decreased from receiving payments sooner. 5. Landfill revenue increased 69% compared to the same period last year. Tipping fees increased by almost $395K from commercial customers and government customers and coupon sales increase by $434K. Revenue is higher than budget for the year at 32%. 6. Other Departmental revenue was 67% ($1.3M) lower than last year at this time. Most of the difference is the result of billing the 2018 waste collection fees by March last year. Rental registries increased by $9K and APD Event Security revenue increased by almost $46K. 7. Fines and Forfeitures revenue decreased by 4% ($56K) from last year. The decrease is due to traffic court fines, which were lower than the first quarter of 2018. 8. Licenses and Permits revenue decreased 28% ($323K) compared to the same period last year. Safety Inspection permits revenue decreased by $74K, stabilization and demolition fees decreased by $176K, parking permit revenue decreased by $23K and taxi medallions decreased by $19K. While plumbing permits increased by $67K and electrical permits increased by $7K. Part of the decrease is timing of BRC permits. 9. State aid – Increased $18K by the end of the first quarter. 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 decreased 74% ($2.2M) compared to the same time last year. This category is made up of refund of prior year expenses, ---PAGE BREAK--- 3 special events revenue and reimbursements from ACDA. Refund of prior year expenses are made up of fees and charges from last year that are included on the property tax bills. These charges can vary from year to year and adjustments for these charges can vary. 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 19 YTD 18 Variance Budget Variance Budget Personal Benefits 19,147,253 18,552,289 594,964 3.2% 77,447,618 (58,300,365) 25% Fringe Benefits 11,235,974 10,929,623 306,351 2.8% 50,727,743 (39,491,769) 22% Non-Personal Service 4,028,462 4,304,630 (276,167) -6.4% 49,296,184 (45,267,722) 8% Total 34,411,689 33,786,541 625,148 1.9% 177,471,545 (143,059,856) 19% Number of weeks in period 13 13 0 52 25% Total disbursements increased by over $625K or 1.9% compared to the same period last year. Spending was up in Personal Benefits and Fringe Benefits while Non-Personal Services decreased compared in the first quarter. However, spending on personal and fringe benefits is well within 2019 budgetary expectations. 1. Salary expense increased by 3.2% compared to the same period last year. Increases in the Fire Department salary and related expenses were responsible for most of the increase in this category. The Fire Department code enforcement stipend $175K was paid in the first quarter this year compared to the 3rd quarter last year and accumulated sick leave pay totaled $319K. This category also includes overtime expenses which ended the quarter almost $214K higher than in 2018. 2. Benefits Expenses increased by 2.8% from the first quarter of last year but was below budget for the first quarter at 22%. Most of the increase in this category was attributable to increases in retirement expenses from ---PAGE BREAK--- 4 NYS which increased ($213K) and retiree health insurance increased ($147K), an item that fluctuates year to year. 3. Non-Personal Service spending decreased by 6.4% or $276K. 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 decreases over last year in the following areas. Utilities expenses decreased $22K, contracted services decreased $152K, debt service was lower by $197K and judgements and claims decreased $124K while snow removal expenses increased $171K. 4. Encumbrances (funds reserved for purchases) decreased by $525K compared to the same period last year. Encumbrances total more than $4.9M at the end of the first quarter. OVERTIME % of Department 2019 2018 Change % 2019 Budget Budget Police (non-reimbursable) 1,089,082 1,036,492 52,590 5% 1,089,082 4,195,090 26% Fire 303,923 152,307 151,616 100% 303,923 439,000 69% Communications 90,684 71,453 19,231 27% 90,684 225,000 40% Parks Maintenance 77,027 72,557 4,470 6% 77,027 185,000 42% Waste Collection 88,505 67,238 21,267 32% 88,505 225,000 39% Landfill 45,612 61,676 (16,064) -26% 45,612 150,000 30% Central Maint. 14,516 18,249 (3,733) -20% 14,516 70,000 21% Street Maintenance 139,045 166,234 (27,189) -16% 139,045 270,000 51% Recreation 1,005 319 686 215% 1,005 12,000 8% Traffic Engineering 10,687 8,919 1,768 20% 10,687 40,000 27% Capital Hills 9,901 5,298 4,603 87% 9,901 26,000 38% Fleet Maintenance 15,064 15,123 (59) 0% 15,064 18,000 84% Bleeker Stadium 125 0 [PHONE REDACTED]% 125 500 25% Buildings 27,951 24,679 3,272 13% 27,951 92,400 30% DGS Administration 2,747 320 2,427 758% 2,747 3,104 88% Control of Animals 2,167 2,733 (566) -21% 2,167 12,000 18% Cultural Affairs 205 146 59 40% 205 12,000 2% General Fund 1,918,246 1,703,743 214,503 13% 1,918,246 5,975,094 32% Police (reimbursable) 258,210 261,047 (2,837) 258,210 1,250,000 21% Fire (reimbursable) 0 0 0 0% 0 110,000 0% Traffic Eng. (reimbursable) 0 0 0 0% 0 500 0% Water 158,738 160,385 (1,647) 158,738 502,250 32% Totals 2,335,194 2,125,175 210,019 10% 2,335,194 7,837,844 30% General Fund overtime was over budget (32%) at the end of the first quarter. Excluding the Water Department (for which the City is reimbursed) and reimbursable Police overtime, overtime expense was 13% ($214K) higher than the same period last year. OT is consistently the largest over-budget expense. ---PAGE BREAK--- 5 The Fire department had the biggest increase in overtime payments which were up by almost $152K. The majority of departments have higher overtime expenses this year than last year. CASH The City’s cash position was 16% lower than forecasted and $6.8M lower than the same period last year. Most of the decrease is the result of the increase in contractor payments for the Albany Water Board related to the Long- Term Control Plan and a decrease in the amount transferred to City from the AWB to pay their expenses. We expect this to even out over the course of the year. CONCLUSION Thus far, there are no major surprises for 2019, as the City is largely moving forward as expected financially. Although the City saw a decrease in overall revenue in the first quarter compared to 2018, this is expected to even out over the course of the year. Expenses were up in the first quarter of 2019 compared to last year at this time, mostly as the result of Fire department contracted benefit payments, increases in retirement costs, over-budget OT, and increases in snow removal expenses. The City must 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 must be found.