TRANSMITTAL LETTER FOR BOARD MEETING OF JUNE 16, 2016
COMMITTEE ON BUDGET AND EMPLOYMENT
Mr. David St. Pierre, Executive Director
Title
Report on Budgetary Revenues and Expenditures for the first quarter of 2016, ended March 31, 2016
Body
Dear Sir:
Attached is a report of revenues and expenditures for the first quarter of 2016, ended March 31, 2016. This report is prepared on an unaudited budgetary basis of accounting.
The actual first quarter Corporate Fund net tax revenue of $114.0 million is 46.2% of the budgeted revenues and is $5.3 million above the collections for the same period in 2015. Actual Corporate Fund non-tax revenue for the period includes the following: user charge income of $14.3 million, TIF surplus distributions of $7.6 million, and rental and easement income of $3.4 million exceeds budget by $3.2 million. These revenue receipts are within the normal range for the period.
First quarter actual expenditures of $73.2 million are 20.0 percent of the $366.3 million Corporate Fund budget. Corporate Fund expenditures through the first quarter are within normal levels. Energy and healthcare costs, two of the primary expenditure drivers, are monitored closely throughout the year. Energy expenditures (electricity and gas) through the first quarter 2016 are about 1.6 percent higher than the same period last year. Healthcare costs are running one percent under the same period last year.
The two primary economic factors driving the District’s revenues are the Consumer Price Index (CPI) and the real estate market. The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.2 percent in February on a seasonally adjusted basis. Over the last 12 months, the all items index increased 1.0 percent before seasonal adjustment. The energy index continued to decrease and was the major cause of the seasonally adjusted decline in the all items index, more than offsetting increases in the indexes for food and for all items less food and energy. The gasoline index fell sharply, declining 13.0 percent. The index for all items less food and energy rose 2.3 percent, its largest 12-month increase since May 2012.
Crain’s Chicago Real Estate Daily reports that commercial real estate continues to show modest increases and loop office vacancy rates are at 11.8 percent in the first quarter, its lowest point since 2001. The Illinois Association of Realtors reports homes sales are up 6.2 percent through February 2016 from the same period for 2015, and the median price also increased 8.6 percent for the same period.
A conservative approach used to develop the 2016 five-year financial plan is expected to maintain budgetary fund balances at policy levels.
Respectfully Submitted, Eileen McElligott, Administrative Services Manager
Attachment
EMC:SAR