TRANSMITTAL LETTER FOR BOARD MEETING OF JULY 11, 2019
COMMITTEE ON BUDGET AND EMPLOYMENT
Mr. Brian A. Perkovich, Executive Director
Title
Report on Budgetary Revenues and Expenditures for the first quarter of 2019, ended March 31, 2019
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Dear Sir:
Attached is a report of revenues and expenditures for the first quarter of 2019, ended March 31, 2019. This report is prepared on an unaudited budgetary basis of accounting.
The actual 2019 Corporate Fund net tax revenue of $117.1 million is 47.1 percent of the budgeted revenues and is $7.0 million above the collections for the same period in 2018. Actual Corporate Fund non-tax revenue for 2019 includes the following: user charge income of $16.0 million, TIF surplus distributions of $9.2 million, and rental and easement income of $4.5 million. These revenue receipts are within the expected range for the period. However, we anticipate only minimal additional TIF surplus distribution during 2019.
The 2019 actual expenditures of $76.4 million are 20.2 percent of the $377.6 million Corporate Fund budget. Corporate Fund expenditures through the first quarter of 2019 are trending higher than normal for the first quarter and are projected to end the year higher than the 91 percent expected expenditure rate. Energy and healthcare costs, two of the primary expenditure drivers, are monitored closely throughout the year. Energy expenditures (electricity and gas) in 2019 are 15.1 percent higher than the same period in 2018. The increase is attributed primarily to the colder than average spring and the wet weather, which required additional pumping and processing costs. Healthcare costs to date are 5.0 percent lower than the same period in 2018.
The two primary economic factors driving the District’s revenues are the Consumer Price Index (CPI) and the real estate market. The CPI for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment. The index for all items less food and energy increased 2.1 percent over the last year. The food index rose 1.8 percent over the past year. The index for energy increased 1.7 percent.
The Illinois Association of Realtors reports that Chicago metropolitan area home sales are down 13.6 percent through March 2019, while the median price has decreased 6.1 percent in the same period.
Relatively low inflation over the past five years has resulted in a small annual increase in property tax revenues. The conservative approach in development of the 2019 budget along with closely monitoring 2019 expenditures. Following a detailed mid-year expenditure review in July as part of the 2020 budget development, expenditure controls will be identified, if necessary, to maintain budgetary fund balances at policy levels.
Respectfully Submitted, Eileen M. McElligott, Administrative Services Officer, SAR
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