Translate[Archived] Question #66: Provide a summary of revenue re-estimates and technical adjustments for add/delete.
Question:
Provide a summary of revenue re-estimates and technical adjustments for add/delete. (City Manager Jinks)
Response:
The purpose of this memorandum is to inform City Council of the technical budget adjustments proposed by staff as part of the add/delete process. This presents the final revenue and expenditure update before the add/delete process. The sum of revenue re-estimate and technical adjustment expenditure changes provides a net General Fund gain of $232,605. Staff recommends this funding be placed in General Fund contingent reserves for unforeseen needs in mid-year FY 2020.
The major changes from the proposed budget are reflected in the chart below and discussed on the following pages.
Revenue Changes
Annually, at the beginning of April, City staff re-estimates current fiscal year and subsequent fiscal year revenues based on additional months of collection data. The result of those projections shows an overall increase of $242,072 compared to the amount estimated in the City Manager’s Proposed Budget.
The table below includes the FY 2020 revenue estimation changes from February to April. Most of these changes reflect an increase in projected interest on General Fund investments, an increase in charges for services, and Compensation Board increases in the proposed.
As discussed at the budget work session there may be significant CSB dollar loss in state aid due to erroneous Medicaid new enrollee revenue estimates that CSB’s statewide might earn. The dollar amount is unknown. Also, at the state level, the General Assembly’s approval of the Internet Sales Tax will result in a gain of an unknown amount by every Virginia local government. With the CSB shortfall and the Internet Sales Tax gain both being unknown dollar values, neither is being counted in these revenue re-estimates since they can be used to partially or fully offset each other.
The revenue re-estimates described in detail below reflect current tax rates and revenue policies continued or already reflected in the FY 2020 Proposed Budget.
The FY 2020 revenue estimates in the FY 2020 Proposed Budget were based on revenue collections and trends through December 2018. The latest estimates are based on revenue collections through March 2019, with exceptions as noted below. Based on actual receipts and trends through March, the FY 2020 revenue estimates have been changed as detailed below. These technical revenue adjustments will be reflected on the preliminary and final Add/Delete lists.
DCHS Refugee Grant Adjustment: The FY 2020 Proposed Budget includes funding from a DCHS Refugee Career Pathways grant from the Office of Refugee Resettlement, U.S. Department of Health & Human Services. This grant will provide 75 refugee professionals in Alexandria and the Commonwealth of Virginia with employment readiness training and job placement in their career fields. This grant is for $80,000 per year for three fiscal years and was included in the Manager’s Proposed Budget to offset General Fund expenses for the DCHS staff implementing the grant. Administration recommends that this grant revenue and associated General Fund expenses be moved to a Special Revenue Fund. For all changes related to this DCHS grant, the impact is net zero when compared to the Manager’s Proposed Budget.
Expenditure Changes
Affordable Housing Fund Transfer Correction: Early in the budget development process, OMB re-balanced the Affordable Housing General Fund transfer based on revised revenue re-estimates. In the process of re-balancing, OMB omitted the General Fund support for Alexandria Housing Development Corporation (AHDC) which is also budgeted in the same line item. This adjustment also impacted the grant match for CDBG funding. To correct for this error, $52,969 is added to the General Fund transfer, $26,169 for AHDC operating support and $26,800 for the CDBG grant match.
Affordable Housing Transfer Re-estimate: A re-estimate on the Meals Tax of $231,000 generates an additional $46,200 for the dedicated Affordable Housing funding in the CIP. This technical adjustment recognizes the additional revenue and increases the General Fund transfer to the Affordable Housing Fund by the increased amount.
DCHS Refugee Grant Adjustment: This represents the decrease $80,000 in the General Fund, in conjunction with the removal of $80,000 of revenue as highlighted above. Administration recommends this grant be recorded in the Special Revenue grant fund instead of the General Fund. The impact is a net zero on the General Fund and an increase of $80,000 to the Special Revenue grant fund.
DCHS Position Reallocation: DCHS submitted a request to reclassify and reallocate a position from the General Fund to a Special Revenue grant fund in FY 2019. The request was approved and will generate $41,627 in savings for the General Fund. The total reclassified position costs $95,116 and will be funded with grant funding and General Fund support based on current grant allocations and formulas.
Magistrate Adjustment: The Magistrate’s Office contacted the Office of Management and Budget to request an update to the City allocation. Per legislation passed in 2008, only magistrates who served in that capacity on June 30, 2008 are eligible for the supplement pay. This past year, two magistrates retired resulting in a savings of $48,075 for the FY 2020 budget.
Special Revenue Funds
NVTA 30% Administrative Fees: On March 21, 2019 the Governor signed SB 1468 into law. This bill removed the authority for NVTA to charge administrative fees on the NVTA 30% (operating) funding. Per the bill, future administrative costs will be calculated as part of NVTA 70% competitive project requests. By reducing NVTA 30% expenditures by $157,500, this allows the amount of revenue budgeted to be used in FY 2020 to be reduced by the same amount and reprogrammed in future years. There is no General Fund impact with this adjustment.
Sheriff Pretrial and Local Probation Grant: The Sheriff’s Office has requested to reduce the anticipated revenue for the Pre-trial and Local Probation grant. This funding is budgeted solely in the special revenue grant funds. The request reduces FY 2020 revenues and expenses to the funding allocation awarded in FY 2019, a total reduction of $15,095.
Affordable Housing Fund Transfer Correction: Early in the budget development process, OMB re-balanced the Affordable Housing General Fund transfer based on revised revenue re-estimates. In the process of re-balancing, OMB omitted the General Fund support for Alexandria Housing Development Corporation (AHDC) which is also budgeted in the same line item. This adjustment also impacted the grant match for CDBG funding. This portion of the technical adjustment recognizes the $52,969, $26,169 for AHDC operating support in the Affordable Housing Fund and $26,800 for the CDBG grant match in the Special Revenue grant fund.
Affordable Housing Transfer Re-estimate: A re-estimate on the Meals Tax of $231,000 generates an additional $46,200 for the dedicated Affordable Housing funding in the CIP. This technical adjustment recognizes the additional revenue from the General Fund via a transfer to the Affordable Housing Fund.
DCHS Refugee Grant Adjustment: This represents the increase of $80,000 in the Special Revenue grant fund to record this revenue and expense solely in the Special Revenue grant fund instead of the General Fund. There is no net impact on the General Fund as both revenues and expenses were removed from the General Fund.
DCHS Position Reallocation: DCHS submitted a request to reclassify and reallocate a position from the General Fund to a Special Revenue grant fund in FY 2019. The request was approved and will generate $41,627 in savings for the General Fund. The total reclassified position costs $95,116 and will be funded with grant funding and General Fund support based on current grant allocations and formulas. The special revenue grant fund increases $95,116 to recognize the position cost which was reallocated from the General Fund.
Capital Projects Fund
Affordable Housing Transfer Re-estimate: A re-estimate on the Meals Tax of $231,000 generates an additional $46,200 for the dedicated Affordable Housing funding in the CIP. This technical adjustment completes the second transfer of funding from the Affordable Housing Fund to the Capital Improvement Program, Affordable Housing Project.
Community Electric Vehicle Infrastructure Strategy: The FY 2020 proposed budget includes $100,000 in Equipment Replacement fund balance for the development of a community electric vehicle charging infrastructure strategy. This is a one-time investment in consultation expenditures in support of the City Environmental Action Plan from the Equipment Replacement fund. This funding will be transferred from the Equipment Replacement fund to the Capital Improvement Program’s Energy Management Project where it will be expended. There is no additional cost for this item, it just changes where the item will be expended.