Quarterly Financial Report
Third Quarter of FY 2021-2022
General Fund Current Financial Condition
The General Fund third quarter financial report reflects an ending undesignated fund balance of $19.1 million, which represents approximately 3.9 months of the General Fund 2022 budgeted operating expenditures ($4.5 million in excess reserve – above the 3-month minimum fund balance reserve policy). The projected ending fund balance is 27 percent or $4.1 million higher than the amended year-end fund balance of $15.0 million.
At the end of the third quarter, expenditures exceed revenues by $1.2 million; this is due to a planned drawdown of fund balance for CIP projects in FY2021-2022.
General Fund - Revenues vs Expenditures
- Taxes and Franchise Fees are projected to come in over budget primarily due to sales tax revenue.
- Licenses and Permits are projected to come in over budget due to liquor licenses, building permits, and electrical permits.
- Intergovernmental is projected to come in under budget due to the transfer from Victoria Sales Tax Development Corporation. This is due to the Economic Development Director position being vacant during the first quarter. The related personnel expenses in the General Fund will also be under budget, therefore, resulting in a net variance of zero.
- Charges for Services are projected to come in over budget due to the net effect of Emergicon Revenue coming in over budget and the Ambulance Supplemental Payment Program coming in under budget.
- Interest income is projected to come in over budget due to an increase in interest rates during the latter part of the second quarter and third quarter.
- Miscellaneous is projected to come in over budget due to the sell of a 2007 Fire Pumper truck and land sales.
- Personnel Services are projected to come in under budget due to vacancies.
- Supplies are projected to come in over budget, mainly due to fuel.
- Maintenance is projected to come in under budget, mainly due to the crack seal maintenance account.
- Contractual Services are projected to come in under budget, mainly due to County Jail Contract, lights & power expense, and striping program accounts.
- Other Charges are projected to come in under budget primarily due to education and advertising expenditure accounts.
- Interdepartmental is projected to come in under budget due to capital replacement charges for vehicle purchases.
- Transfers are projected to come in under budget due to the FY 2022 Seal Coat Project contract coming in under budget.
- Capital is projected to come in under budget, due to building and various equipment expenditure accounts.
- Taxes and Franchise Fees are coming in over budget due to Property Taxes (which are paid primarily in December and January) and Sales Tax line items.
- Licenses and Permits are coming in over budget due to liquor licenses and building, electrical, and plumbing permits line items.
- Intergovernmental is coming in under budget due to contracts with Victoria County and Victoria Sales Tax Development Corporation who make payments later in the fiscal year.
- Charges for Services are coming in over budget due to ambulance revenues.
- Fines and Forfeitures are coming in over budget due to the Crime and Traffic Violations line item.
- Other Financing Sources are coming in over budget due to the Salvage & Material Sales line item.
- Interest income is coming in under budget due to historically low interest rates. Rates have rebounded since the second quarter of FY 2022, and interest income is expected to finish the year over budget.
- Miscellaneous is coming in over budget due to the sell of a 2007 Fire Pumper truck.
- Personnel Costs are coming in under budget due to vacancies.
- Supplies are coming in over budget due to the net effect of fuel coming in over budget and ammunition and small tools expenditure line items coming in under budget.
- Maintenance is coming in over budget due to software, streets and roadways, and traffic signal maintenance expenditure line items.
- Contractual Services are coming in under budget due to County jail contract, drug testing, and Lights & Power expenditure line items.
- Other Charges is coming in over budget due to net effect Subscriptions & Memberships and Other Employee Relations coming in over budget and education development and electronic subscriptions coming in under budget.
- Interdepartmental is coming in over budget due to annual insurance charges being posted in the first quarter.
- Transfers are coming in over budget due to awarding contracts for major CIP projects.
- Capital Outlay is coming in under budget due to budget due to the timing of expenditures. These purchases are made irregularly throughout the fiscal year.
Budget Amendments
As of the third quarter of FY 2021-22, the General Fund Budget has been amended twice in the amount of $112K for ambulance equipment and $777K for the FY 2020-21 carryover encumbrances (these encumbrances were not included in this financial report since the funding for the FY 2020-21 encumbrances came from the prior year reserved fund balance of $777K).
As of the second quarter of FY 2022, the General Fund had 53 vacancies out of 469 approved full-time positions.
Tax Rate History
- The total tax rate for FY2022 is $2.3976.
One of the largest revenue sources for the City of Victoria, 30 percent of the revenue budget, is sales tax collections. A valuable way to understand sales tax trends is to look at the rolling 12-month (R12) collections over a long period of time. Recessions can easily be spotted with the dip in sales tax. In fact, the R12 percentage is an earlier indicator than the absolute dollars. The City’s R12 percentage has been on a upward trend over the past year, which would indicate growth in sales tax receipts. Some of this growth can be attributed to recovery from the decline in sales tax receipts during FY2020 as well as stimulus programs and inflation.
Sales tax receipts have surpassed pre-COVID levels; Finance will monitor receipts as the economy continues to experience hurdles due to supply chain and inflation issues.