TRANSMITTAL LETTER FOR BOARD MEETING OF MAY 2, 2013
COMMITTEE ON BUDGET AND EMPLOYMENT
Mr. David St. Pierre, Executive Director
Title
Report on Budgetary Revenues and Expenditures for the Year Ended December 31, 2012
Body
Dear Sir:
Attached is a report of revenues and expenditures for the year ended December 31, 2012. This report is prepared on an unaudited budgetary basis of accounting.
In general, Corporate Fund revenues were higher than budgeted and expenditures were lower than budgeted due to position vacancies, continued decreases in contractual services for plant maintenance, and reduced energy expenditures.
The actual 2012 Corporate Fund net tax revenue of $268.1 million is $9.0 million above the 2012 budget of $259.1 million for the tax levy collection. A significant reason for the variance is a higher collection rate than anticipated. However, for a number of years we have seen this higher collection rate offset by refunds in the later years.
Actual Corporate Fund non-tax revenue for 2012 includes the following: user charge income of $69.0 million exceeds budget by $27.0 million, TIF distributions of $6.1 million exceeds budget by $5.3 million, rental and easement income of $12.4 million exceeds budget by $0.9 million, and investment income of $2.7 million exceeds budget by $0.6 million. There were no land sales in 2012. Overall, non-tax revenue exceeds budget by $36.7 million.
The two primary economic factors driving the District's revenues are the Consumer Price Index (CPI) and the real estate market. The CPI rose 1.7 percent in 2012 over December 2011. The energy index increased a mere 0.5 percent in 2012, a sharp change from 2011 when the index rose 6.6 percent compared to 2010. The natural gas index was down 2.9 percent in 2012, declining for the fourth straight year.
Non-residential construction remained weak, despite improvement in the light industrial and office segments. In the nine-county Chicago Primary Metropolitan Statistical Area (PMSA), home sales were up 26.7 percent in 2012 as compared to 2011. Despite this improvement, foreclosures continued to dampen the housing recovery in Illinois. Clearing a foreclosure in Illinois is a much longer process than the national average, taking almost two years for the judicial process, which is the fourth slowest in the country. In Cook County, the year-over-year median price for home sales saw an increase for Cook County of 7.7 percent to $150,000.
The District is in a favorable financial position and a conservative approach in development of the 2013 five-year financial plan is expected to maintain budgetary fund balances at policy levels and ensure financial stability in the coming years.
Respectfully Submitted, Eileen McElligott, Administrative Services Manager, BKS
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