TRANSMITTAL LETTER FOR BOARD MEETING OF JUNE 6, 2013
COMMITTEE ON BUDGET AND EMPLOYMENT
Mr. David St. Pierre, Executive Director
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Report on Budgetary Revenues and Expenditures Through First Quarter March 31, 2013
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Dear Sir:
Attached is a report of revenues and expenditures for the first quarter ended March 31, 2013. This report is prepared on an unaudited budgetary basis of accounting.
The first quarter of 2013 includes receipts from the first real estate tax installment, which were due on March 1. First quarter receipts are within normal levels.
Preliminary Corporate Fund expenditures for the first quarter are above normal levels due to a $30.0 million equity transfer to the Retirement Fund. Energy and healthcare costs, two of the primary expenditure drivers, will be monitored closely throughout the year. The first quarter 2013 electricity expenditures for the Maintenance and Operations Department have consumed 28.5 percent of the electricity budget, which is within expectations. Healthcare costs are overall slightly below budget for the quarter; however, it is too early to know if that favorable trend will continue through year-end.
The two primary economic factors driving the District's revenues are the Consumer Price Index (CPI) and the real estate market. The CPI rose 1.4 percent in the first three months of 2013 and 1.5 percent over the past twelve months. The energy index declined 1.0 percent in January, rose 5.4 percent in February, and decreased 2.6 percent in March. The swings have primarily been as a result of the changes in gasoline prices.
Commercial real estate construction remains weak. Residential activity in the nine-county Chicago Primary Metropolitan Statistical Area has been positive through the first quarter of 2013: there has been an increase in residential construction activity; foreclosed sales are outpacing new additions to the foreclosure inventory; and sales increased 25.2 percent as compared to March of 2012, with a median sales price increase of 1.4 percent. Buyers are seeking to lock in low interest rates, and take advantage of pricing before price increases become significant.
A conservative approach used to develop the 2013 five-year financial plan is expected to maintain budgetary fund balances at policy levels.
Respectfully Submitted, Eileen McElligott, Administrative Services Manager, BKS
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