MONTGOMERY COUNTY. Board of Commissioners Meeting Financial Update

Transcription

1 MONTGOMERY COUNTY Board of Commissioners Meeting Financial Update July 12, 2018

2 Presentation Overview Review of Audited 2017 General Fund (GF) Financial Results as of December 31, 2017 Update on 2018 General Fund (GF) Financial Results as of May 31, 2018 (unaudited) Review of 2018 Revenue Budget Performance Review of 2018 Expenditure Budget Performance 2

3 2017 General Fund Financial Results 2017* 2017** General Fund (Million $) Budget Preliminary Audited $ Var % Var Beginning Fund Balance $ 39.6 $ 57.2 $ 57.2 Revenues % Expenses (6.1) -1.6% Revenues in Excess of Expense Ending Fund Balance $ 45.7 $ 83.9 $ 84.4 Ending FB as a % of Annual Operating Revenues 11.6% 20.6% 20.7% *Net of Montgomery County Community College ($22.3 M) **Preliminary 2017 pre-audit General Fund Financial Results 2017 Actual finished with $27.2 Million of Revenue in Excess of Expense 2017 Revenues are +$15 Million higher compared to 2017 Budget 2017 Expenditures are $6.1 Million lower compared to 2017 Budget Includes $2.6 Million of GF negative appropriations Audit adjustments improved bottom line by $500, Ending Fund Balance is $84.4 Million or 20.7% of Revenue 3

4 2018 General Fund (GF) Financial Performance Through May 31, 2018 (unaudited) Actual General Fund (Million $) 5/31* % of Budget Beginning Fund Balance $ 63.5 $ 84.4 Revenues % Expenses % Revenues in Excess of Expense Ending Fund Balance $ 67.3 $ Ending FB as a % of Annual Operating Revenues 16.5% *Unaudited 2018 General Fund Financial Results Year-to-Date on May 31, 2018 Overall positive budget trend in 2018 Revenue and Expenditures in-line with 2018 Budget Updated General Fund 2018 forecast will be included with Proposed 2019 Budget 4

5 2018 GF Revenue Performance Collected $268 Million or 66% of the Total 2018 Revenue Budget ($407.2 Million) No surprises overall revenue as expected Federal and State grant revenues received timely to date Closely monitoring revenues sensitive to the economy mixed results to date Recorder of Deeds (Slower home sales) RE Assessment (Moderate growth) RE Assessment Appeals (Lower compared to 2016) Planning Department (Building activity - good) 5

6 2018 GF Revenue Performance Where the $268 Million of revenue came from: Departmental Earnings 7.3% Other Revenue 0.6% Grants 21.9% Real Estate Taxes 70.2% 6

7 2018 GF Revenue Performance County Real Estate Tax (RET) Collections Consistent with Historical Collections Collected $188 M or 92% of 2018 RET Budget at May 31, 2018 (end of flat period) % of Total Real Estate Taxes Budget Actual Budget Current Year $ 203,455,000 $ 188,118, % Delinquent and Liened 3,500,000 1,455, % Discount (3,759,000) (3,707,000) 98.6% Penalty 450, , % Prior Year 1,500,000 1,664, % Settlement - Protest 300, , % Total $ 205,446,000 $ 187,948, % Collected $21 Million of Montgomery County Community College RET (Contained in MCCC Fund) 7

8 2018 Revenue Performance Montgomery County Historical Real Estate Tax Assessment Growth (As of (Billions) Jan 1st) Assessed % Year Valuation Inc/(Dec) 2007 $ % 2008 $ % 2009 $ % 2010 $ % 2011 $ % 2012 $ % 2013 $ % 2014 $ % 2015 $ % 2016 $ % 2017 $ % 2018 $ % 2018 (YTD) $ % 8

9 2018 GF Revenue Performance County Real Estate (RE) Assessment Base moderate growth through May 2018 RE Assessment Base = $ Billion $119 Billion of estimated RE Market Value RE Assessments increased +0.25% or $115 Million Provides new net RET revenue of approx. $500,000 for County New MCCC RET approximately $56,000 9

10 2018 GF Revenue Performance County Real Estate (RE) Assessment Base Growth Areas in

11 2018 Home Sales Performance May 2018 compared May 2017 Continued trend of low housing inventory slows home sales in Philadelphia/Suburban Region 2018 Year to Year % Change Metric as of May 31st Trend No. of Properties Sold $ 1, % No. of Properties Sold $ 5, % Median Price of Properties Sold $ 285, % Median Price of Properties Sold $ 260, % Average Price of Properties Sold $ 327, % Average Price of Properties Sold $ 310, % Average Days on Market % Average Days on Market % Properties Under Contract 1, % Properties Under Contract 5, % Montgomery County Five County Region (Bucks, Chester, Delaware, Montgomery and Philadelphia) Source: Berkshire Hathaway HomeServices (BHHS) 11

12 2018 Montgomery County Home Sales Performance Top 11 Municipalities Represent 50% of Total Home Sales (1,079) Number of Properties Sold Median Price of Properties Sold Municipality May 2018 May 2017 % Change May 2018 May 2017 % Change Lower Merion % $ 545,000 $ 500, % Abington % 280, , % Cheltenham % 249, , % Pottstown % 121,700 97, % West Norriton % 215, , % Upper Providence % 293, , % Montgomery % 317, , % Upper Merion % 363, , % Horsham % 297, , % Upper Dublin % 381, , % Norristown % 133, , % Source: Berkshire Hathaway HomeServices (BHHS) 12

13 2018 GF Revenue Performance Other Revenue Items: Prothonotary revenues are flat compared to 2017 actual and trending below the 2018 Budget Implemented fee increase across-the-board in 2018 offset by lower than expected transaction volume Gaming revenue Q1 allocation higher than expected Trending to outperform budget by $500,000 13

14 2018 GF Revenue Performance Other Revenue Items: Investment Income revenues trending higher than budget Federal Reserve raised short-term interest rates from 1.5% (Dec 2017) to 2% ( June 2018) Immediate positive impact on County s short-term investments Recorder of Deeds (ROD) revenues down $225,000 or -8.6% compared to 2017 Slower home sales negatively impacting ROD revenues 14

15 2018 Montgomery County GF Revenue Performance Recorder of Deeds (ROD) Revenue 2018 Compared to

16 2018 GF Expenditure Performance Overall Budgetary Performance 2018 Actual Expenses = $156.3 Million or 38.7% of 2018 Budget As expected for first half of the year; except for: Higher costs for implementation of Compensation Study Anticipate higher costs offsetting personnel savings Higher overtime costs due to vacancies and Cosby trial Healthcare costs trending moderately lower than budget Moved $4 million of 2018 Pension Plan contribution into Retirement Fund 16

17 2018 GF Expenditure Performance Staffing Turnover Approximately 5% of the County s staff turned over since Jan 1 st Includes retirements, resignations and terminations Positions Positions Positions Positions Function Turned Over Turned Over Filled Filled General Judicial Corrections Parks Human Services Safety Public Property Commerce Total

18 2018 Financial Outlook County Short-term Outlook Cautiously Optimistic Concerns of potential slow-down of the economy and other factors: Financial market volatility Rising short-term interest rates Record high stock market performance Experiencing energy market volatility Political uncertainty at Federal and State levels Potentially could negatively impact future grant revenues and other sources of funding 18

19 2018 Financial Outlook Historical Economic Expansion Phases in the U.S. Current expansion phase began in June 2009 (108 months to date) Average between for 11 expansion cycles = 58.4 months Longest period was 120 months between 1991 and 2001 Start and End Periods No. of Months June 2009 June 2018 (Current) 108 November 2001 December March 1991 March November 1982 July July 1980 July March 1975 January Source: National Bureau of Economic Research and PFM 19

20 Update on 2019 Financial Planning Departmental Budget meetings begin July 17th Departments preparing preliminary 2019 budget submissions (Capital and Operating) Budget meetings scheduled into early September Distribution of the Proposed 2019 Budget and Capital Improvement Program (CIP) Budget : Scheduled for November 15 th (regular BOC meeting) Followed by Public Hearings and adoption of Proposed 2019 Budget and CIP: (during November December BOC meeting cycle) 20

21 End of Presentation 21