Update MEMORANDUM TO: SUBJECT: SUMMARY

TO:

FROM:

SUBJECT:

MEMORANDUM

County Council

Jacob Sesker, Senior Legislative Analyst '('

Update: Fiscal Plan and Economic Indicators

Agenda Item 4 December 12, 2017 Update

December 8, 2017

0MB Director Jennifer Hughes, Finance Director Alex Espinosa, and their colleagues will join the Council for this fiscal review. They will discuss Ms. Hughes' fiscal plan update memo on© 1-4, the updated fiscal plan on ©5-7, and the revenue and economic indicators update on ©8-31. Two November 30 memos outline the justification for and parameters of an FYI 8 Savings Plan for County Government and County agencies (©32-35), while an earlier memo provides guidance to departments for FY19 (©36-38). Fiscal plans and updates from June 2014 to June 2016 illustrating the variation from one plan to the next are also attached. (©39-43)

SUMMARY

In June 2010 the Council approved for the first time a six-year fiscal plan that was balanced for the entire period.1 Each June since then the Council has taken similar action. The fiscal plan is then updated every year in December. Updates to economic indicators and revenue projections often result in a six-year plan that is more (or less) constrained than the one approved in June. What this update shows-as rows 20 and 28 on ©5 illustrate-is that resources available for FY19 agency budgets will be limited.

Ms. Hughes' fiscal plan memo states that FY19 resources available for agencies will be $208 million (4.8%) below the FY18 level. Maintenance of effort laws limit the extent to which education budgets are affected by any resource shortfalls. The result is that the fiscal plan projects resources available to fund County Government and the Maryland-National Capital Park and Planning Commission (MNCPPC) in FY19 will be 11.7% below the FY18 level (shortfalls of $189.1 million and $14.7 million, respectively). The updated revenue projections for the six-year period (FY18-23) are $417 million below the projections made just five months ago.

'On June 29, 2010, the Council approved policies on reserve and other fiscal matters in Resolution No. 16-1415. Action clause 5 states: The County should adopt a fiscal plan that is structurally balanced, and that limits expenditures and other uses of resources to annually available revenues. The fiscal plan should also separately display reserves at policy levels, including additions to reserves to reach policy level goals. On November 29, 2011, the Council strengthened these policies in Resolution No. 17-312, which retained the fiscal plan language and replaced the earlier resolution.

In light of these resource constraints, the Chief Administrative Officer has already asked departments and agencies to propose (mid-year) FYI 8 operating budget savings of at least 2.0%. The FYI 9 operating budget guidance to departments indicates that departments should identify operating budget savings of 1.5% for public safety and 3 .0% for all other departments. Ms. Hughes has also stated that "further reductions and other gap closing measures are very likely to be needed."

This new information about revenue is difficult to reconcile with the positive indicators described in the attached slides. Nationally, gross domestic product growth is strong, and the broadbased S & P 500 index rose 20.4% during the year ending· on November 30, 2017. The County's October unemployment rate is 3 .1 %, down from 3 .4% one year ago. Resident employment was 551,000, up from 537,000 one year ago. Payroll/at-place employment was 466,000 in March of 2017, up 1.3% over the year. Other measures of employment show growth accelerating in the second and third quarters of calendar year 2017. Furthermore, the County's fiscal strength and financial management were factors considered when all three major bond rating agencies again reconfirmed the County's AAA rating in October.

Current indications are that the State's fiscal outlook is favorable. In September 2017 the Maryland Board of Revenue Estimates reduced its estimate for FY18 personal income tax by $15.0 million (-0.2%), reflecting an upward revision for withholding but write-downs for estimated and final payments. This downward revision is clearly a much smaller downward revision than this $79 million write-down of County income tax revenues. In any event, State revenue projections, often a good indicator of Montgomery County's fiscal situation, will be updated on December 13.

Of course, projected resources often change dramatically between the time the fiscal plan is approved in June and the time the operating budget is approved the following May. Over the coming weeks, new data points will illuminate economic and fiscal conditions, and additional resources and savings will affect the size of the current gap. Recent examples illustrate not only that projections change from one plan to the next, but that this is not the first December update to project a significant shortfall of resources in the upcoming fiscal year. See, for example, June 2014 through June 2016 fiscal plans attached at ©39-43.

• In June 2013 the approved FY14-19 fiscal plan projected a 5.0% decline in agency resources for FY15-that is, resources for the four tax supported agencies (County Government, MCPS, Montgomery College, and M-NCPPC). By December 2013 the fiscal picture had improved, and this was reflected in a smaller projected decline of 0.9%. Actual agency resources in the Council's FY15 approved budget in May 2014 were up 3.8% compared to FY14. In the end, agency resources for FY15 were $330 million above the projection made one year earlier.

• In June 2014 the approved FY15-20 Fiscal Plan projected a 1.2% decline in agency resources for FYI 6. The December 2014 Fiscal Plan update projected a much larger decline of 6.1 %. Because the State requires Maintenance of Effort level funding for MCPS and the College, the projected decline for County Government and M-NCPPC in FYI6 was an astonishing 15.2%. Actual agency resources in the Council's FY16 approved budget in May 2015 were up 1.9%. In the end, agency resources for FY16 were $311 million above the projection made five months earlier.

• In June 2015 the approved FY16-21 Fiscal Plan projected a 2.1% decline in agency resources for FYI 7. The December 2015 update increased the projected gap to 4.5%. The projected decline for County Government and M-NCPPC in FYI? was 11.5%, similar to the gap projected today for FY19. In the FY17 approved budgets, resources allocated to agencies was $476.3 million above the resources projected in December of 2015.

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The Council will have multiple opportunities over the next two months to seek clarification or updates on the issues and challenges described in Ms. Hughe's memo. For example, on January 16 the Council will review the factors driving the cost of government and structural budget issues, and introduce a resolution for the FY19 spending affordability guidelines for the operating budget. It is also likely that in January the Council will review and consider an FYl 8 savings plan for County government.

POLICY ASSUMPTIONS

Fiscal projections change as local, national, and global economic and financial prospects change. The County Executive's recommended operating budget will reflect any new information or changes to conditions over the next three months.

The policy assumptions for this version are listed in the notes on ©5:

a) Property tax revenue at the Charter limit, with a $692 credit, is assumed throughout the 6-year period. Other taxes are at current rates.

b) Reserve contributions are at the policy level and consistent with legal requirements, ramping up to 10% by FY20. See ©4.

c) PAYGO, debt service, and current revenue reflect the Council's Approved FYl 7-22 Capital Improvements Program.

d) State aid, including MCPS and Montgomery College, is assumed to be flat in FY20-23 because, while increases may well occur, the amounts are currently unknown.

e) Projected FY19 allocations for MCPS and Montgomery College assume funding at maintenance of effort. The allocations do not include potential increases to State Aid or other possible agency resources, such as the use of additional fund balance. Additional State Aid or use of fund balance would increase the rate of growth for MCPS and Montgomery College.

It is worth noting that some known commitments will place additional pressure on agency budgets in FY19 and beyond. Examples of such commitments include the annualization of compensation agreements, known future fiscal impacts of current initiatives, and the operating budget impacts of current capital projects. The balanced fiscal plan illustrates the reductions to agency allocations that would be necessary given the projected revenues and known fixed commitments/fiscal policies-it does not illustrate the revenue measures necessary to meet all known commitments.

REVENUE PROJECTIONS

Projected FY18 revenue is $95 million below the revenue expected at the time that the budget was approved. Projected FY19 revenue is $86 million below the June projections. The cumulative total of all adjustments is $417 million over the six-year fiscal plan (see table on the following page).

Finance projects a $13.5 million decline in FY19 property tax revenue due to inflation falling well short of projection. Because the fiscal plan assumes property tax revenue at the Charter Limit in each year, and because the Charter Limit is a function of inflation and property tax revenue from the previous year, a change to the FY19 property tax revenue affects revenue in subsequent years. Low inflation, which recently has been the rule rather than the exception, could be a factor in future years as well.

This year, as is often the case, income tax revenue uncertainty is central to the fiscal plan update. The County's income tax revenue is more volatile than other local tax revenue. In the pre-recession years (FY05-FY08), revenue rose 3 7% from $941 million to $1,291 million. It was flat the following year

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(FY09) before falling 19% to $1,042 million in FYl0. Income tax revenue bottomed in FYl 1 at $1,039 million before rising 21 % the following year (FY12) to $1,255 million. For FY18, income tax revenue had been projected to reach $1,558 million, but now is projected to come in nearly $79 million below that number. The volatility of income tax revenue from year to year, and within any year, presents challenges for fiscal planning.2 Slides attached on ©8 through ©31 illustrate this volatility.

To a large degree, that volatility is the result of the year-to-year variations in the capital gains income of a small number of County residents. Illustrating this point, part of the projected FYl 8 decline in income tax revenue can be traced to a sharp drop in the capital gains of the County's top 50 taxpayers, who realized gains in tax year 2016 that were 50% of the gains realized in tax year 2015, resulting in $21 million less in County income tax revenue (Revenue Administration Division of the Maryland Comptroller). Staffs review of tax return data published by the Comptroller indicates that roughly 1.8% of Montgomery County returns report income of $500,000 or greater. On average, these returns explain more than half of any year-to-year increases in income tax revenue, and explain more than 100% of any year-to-year declines in income tax revenue.

Other revenue projections have also been revised downward. A low volume of home sales and the lower General Fund recordation tax rate ( effective September 1, 2016) have resulted in downward revisions to transfer and recordation tax revenue in FY18 and each year thereafter. Energy tax revenue, lower than expected in FYI 7 due to the unseasonably warm winter, has also been revised downward in future years -in fact, the total reduction in projected energy tax revenue is $100 million over six years.

Fiscal Plan December 2017 vs. June 2017

TAXES FY18 FY19 FY20 FY21 FY22 FY23 Total Property Tax (0.881) (13.498) (10.969) (6.033) (3.393) (0.578) (35.352)

2 Income Tax (78.805) (54.314) (14.488) (9.008) (25.438) (29.868) (211.921) 3 Transfer Tax (1.670) (2.440) (7.120) (10.350) (9.890) (8.980) (40.450) 4 Recordation Tax (0.872) (1.269) (3.674) (5.329) (5.140) (4.635) (20.919) 5 Energy Tax (12.186) (14.028) (15.861) (17.730) (19.392) (20.875) (100.072) 6 Telephone Tax (0.721) (0.582) (0.496) (0.611) (1.888) (3.429) (7.727) 7 Hotel/Motel Tax (0.089) (0.245) (0.404) (0.563) (0.721) (0.878) (2.900) 8 Admissions Tax 0.179 0.184 0.191 0.197 0.203 0.210 1.164 9 £-Cigarette Tax 0.090 0.091 0.092 0.094 0.095 0.096 0.557 10 Total Local Taxes 94.956 86.100 52.730 49.333 65.564 68.937 417.620

RESOURCES AVAILABLE TO ALLOCATE TO AGENCIES

The December fiscal plan projects resources available_ for agency uses in FY19 will be 4.8% below the agency uses in FY18. In June, the fiscal plan projected resources available to all agencies in FY19 would be only 0.4% below FY18. State maintenance of effort laws for MCPS and the College place negative pressure on the budgets of County government and M-NCPPC during periods of fiscal stress.

2A November 2016 State report, Report on Revenue Volatility and Approaches to Reduce Risk to the State Budget, suggested capping the amount ofnon-withholding revenue that will be appropriated in the budget. See ' http://mgaleg.maryland.gov/pubs/budgetfiscal/2016-revenue-volatility-report.pdf

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http://mgaleg.maryland.gov/pubs/budgetfiscal/2016-revenue-volatility-report.pdf

Consequently, the fiscal plan projects that resources available to fund those budgets will be 11.7% below the FY18 level.

Agency resources are a function not only of revenue but also of fixed commitments ( e.g., debt service). In the absence of additional revenue or reduced fixed commitments, agency allocations will continue to be constrained. In September the Council set the spending affordability guidelines for the capital budget at $1,860 million over six years ($330 million in FY19, $320 million in FY20, $310 million in FY21, and $300 million in FY22-24). This Council action reflects a reduction from the previous general obligation bond limit of $2,040 million over six years ($340 million per year), but is not reflected in the fiscal plan update. Other changes since June include a drawdown of reserves in FY18 and significant additions to reserves in FY19 to restore reserves to the policy level.

OTHER KEY POINTS

The national economy has been expanding for nearly nine years. Employment and wage growth, slow for much of that expansion, has accelerated. Local economic indicators also continue to point in the right direction. Finance's updated economic outlook highlights that the unemployment rate is down, and resident and at-place employment are both up--by some measures, up sharply. In spite of these positive signs, the County not only faces the pressing fiscal concerns outlined in this memorandum, but also geopolitical and regional economic risks.

• Geopolitical risks: Foreign policy crises seem both more numerous and more salient today than in recent memory. North Korean missiles may soon be capable of striking anywhere in the United States. Western intelligence agencies continue to uncover Russian efforts to interfere with and manipulate the domestic affairs and elections of our allies throughout the hemisphere. Instability in the Middle East continues, with hotspots flaring up in Turkey, Iraq, Syria, Yemen, Saudi Arabia, Lebanon, Kurdistan, and Jerusalem. The tragic collapse of Venezuela continues, and has the potential to turn into a much more severe and widespread humanitarian disaster in Latin America.

• Regional economic risks: Closer to home, a Federal government shutdown has apparently been averted by a stopgap that would delay the shutdown by a mere two weeks. Congress is attempting to finalize a tax bill next week that could have a destabilizing effect on the finances of households and governments across the region. Federal (civilian) government spending, one-eighth of the County's economic output, seems more likely to drag than lift the economy over the next three years. The nation's ongoing debate about immigration also has the potential to impact the regional economy, given the many thousands of area residents whose temporary protected status or deferred action status could be affected in the coming months.

OTHER RELEVANT RESOURCES

Two documents prepared for the Council in April provide important context: the operating budget overview3 and the review of compensation and benefits.4

In addition, on November 17, 2015 the Council reviewed the factors-both within and outside of the Council's control-that drive the cost of government.5 That memorandum was prepared for the

3 See http://montgomerycountymd.granicus.com/Meta Viewer.php?view id=l 69&clip id= 13108&meta id=l 34851 4 See http://montgomerycountymd.granicus.com/Meta Viewer.php?view id=I 69&clip id=13166&meta id= 135903 5 See http://montgomerycountymd.granicus.com/MetaViewer.php?view id=I69&clip id=l0488&meta id=92904

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http://montgomerycountymd.granicus.com/MetaViewer.php?view_id=169&clip_id=13108&meta_id=134851



Council's benefit in anticipation of the FYI 7 property tax increase that was proposed by the County Executive in March of 2016. As noted above, the Council will again discuss the factors driving the cost of government on January 16, 2018.

Finally, the Interactive Fiscal Plan model developed by the Office of Legislative Oversight enables users to assess the impact of different tax and spending scenarios over the six-year period.6 OLO incorporates the data from the fiscal plan once it is approved. Users can model scenarios both more optimistic and more pessimistic than the one presented today.

f:\sesker\op bud & fiscal planning\fyl 8\fiscal plan\december update\december update memo.docx

6 See htt_p://www.montgomerycountymd.gov/OLO/Resources/Files/Programs/IntroductionOuickGuide2.pdf.

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http://www.montgomerycountymd.gov/OLO/Resources/Files/Programs/IntroductionQuickGuide2.pdf

Isiah Leggett County Executive

OFFICE OF MANAGEMENT AND BUDGET

MEMORANDUM

December 6, 2017

TO: Stephen B. Farber, Council Administrator, County Council

FROM: Jennifer A. ~ Director, Office of Management and Budget

SUBJECT: Update to FYl 8-23 Fiscal Plan

Jennifer A. Hughes Director

Attached please find the updated fiscal plan and supporting documents. The Department of Finance's updated revenue forecast has been incorporated in the fiscal plan. The plan also reflects a set-aside in FYl 8 for snow-related expenses as described below. Other assumptions in the fiscal plan including FYl 7 year-end results, funding for the Capital Improvements Program, and other non-agency spending have not changed. Because this is a limited update to fiscal assumptions, the projections are preliminary, and the fiscal plan included as part of the County Executive's recommended budget next March will differ from this one. However, this fiscal update is critical for the Executive's budget formulation process and will provide context for the many difficult decisions he is likely to make in developing his recommended FY19 Operating Budget. This update also informs decision making around spending for the duration of FYl 8, including the FYl 8 savings plan proposed by the County Executive.

The updated fiscal plan reflects a significant decline in FYl 8 and FYl 9 revenues compared to the fiscal plan as approved in May though a slight increase from FY18 to FYl 9 is still projected. Agency spending must be reduced by 4.8 percent-or $208 million-from the FY18 approved level to balance the budget in FY19. Because State maintenance of effort laws limit the extent to which appropriations can be reduced for the Montgomery County Public Schools (MCPS) and Montgomery College (MC), the majority of this reduction will need to be made to the budgets of Maryland-National Park and Planning Commission (M-NCPPC) and County government. This translates to an 11. 7 percent reduction to the budgets of these two agencies, or $14.7 million for M-NCPPC and $189.1 million for County government. Given this change in the resources expected to be available for FYl 9, the County Executive has asked departments to identify target budget reductions of 1.5 percent for public safety and 3 .0 percent for all other departments, understanding that further reductions and other gap closing measures are very likely to be needed.

Office of the Director

101 Monroe Street, 14th Floor • Rockville, Maryland 20850 • 240-777-2800 www.montgomerycountymd.gov

montgomerycountymd.gov / 311 240-773-3556 TTY CD

Stephen B. Farber, Council Administrator, County Council December 6, 2017 Page2

As detailed below, the revenue shortfall reflected in the updated fiscal plan is driven primarily by lower than expected FY18 income tax revenue receipts. In response to this shortfall, the Executive has taken immediate action to control FY18 spending. This includes developing a proposed savings plan, the reinstitution of a position exemption process, and the expansion of the existing procurement exemption process. Please note that because this is a limited update, the fiscal plan does not yet reflect the impact of these FYl 8 cost saving initiatives. As difficult as they are, these FYI 8 cost saving actions are necessary to avoid an unfavorable year~end result.

Update to Revenue Projection and Reserves

The primary driver of the changes reflected in the fiscal plan update is the revised revenue forecast. Significant shortfalls in FY18 and FY19 will require immediate corrective action. In addition to the revised revenue forecast, the updated fiscal plan includes revisions to the required reserve contributions, and a set aside for snow-related spending in FYl 8. These changes are outlined in greater detail below:

l. Revenues: In the FY18-23 Fiscal Plan as approved in June 2017, tax-supported revenues were budgeted at $4.83 billion for FYl 8 and projected at $4.96 million for FYI 9. These revenue estimates were revised downward due to lower than expected receipts as of November 2017. The revised estimate for FYI8 is $4.74 billion-about $95 million below the approved budget; and the revised projection for FYI 9 is $4.88 billion-about $86 million below the amount projected in the June 2017 fiscal plan. Combined, this reduction in revenues represents a 3 .6 percent variance against the original FYI 9 revenue projection. This variance of about $181 million will have a significant impact on FY19 budget development.

As detailed in the Department of Finance's December 2017 Revenue Update and Selected Economic Indicators report, the revenue shortfall is mostly seen in income taxes. The County's November income tax distribution was significantly below expectations, primarily driven by a nearly 30 percent decline in income tax revenue from taxpayers filing extensions for tax year 2016. According to the Maryland Comptroller's Office, other jurisdictions in the State are also experiencing similar reductions in their November reconciliation distributions. These declines contrast with economic indicators that suggest a more robust economy. The Department of Finance has been actively engaged with the State Comptroller's Office to better understand the reason for this unexpected decline. However, all discussions with State revenue officials to date suggest that the estimates are accurate, and that the current income tax forecasts for FYI 9-24 may be further affected by Federal tax code changes and general economic conditions.

Stephen B. Farber, Council Administrator, County Council December 6, 2017 Page 3

Careful attention will be paid to income taxes as revenue forecasts are updated based on additional information that will be received later in the fiscal year. The revised revenue forecast also reflects shortfalls in energy taxes, which varies with weather conditions and may also be due to improved energy conservation efforts. The revised property tax estimate is at the Charter limit, but is lower than the estimate in the approved fiscal plan primarily due to a decline in the projected rate of inflation. The full Revenue Update and Selected Economic Indicators report prepared by the Department of Finance is attached to this transmittal.

2. FY19 Expenditures: The fiscal plan assumes FYl 9 expenditures for MCPS and MC at maintenance-of-effort. To balance the fiscal plan, FY19 expenditures for County government and M-NCPPC are reduced by 11.7 percent. In total, agency expenditures decline 4.8 percent, or $208.8 million, compared to the FY18 budget. It should be noted that the projected shortfall does not account for several cost increases anticipated for FY19, including adjustments to compensation, increased benefits costs, Maintenance-of-Effort adjustments due to updated school enrollment estimates, and annualization of new programs, among other cost pressures likely to increase the budget gap. The current version of the fiscal plan also excludes the impact ofFY18 savings plan initiatives and requested target reductions for FYI 9.

3. Reserves: Prior fiscal year results are not yet finalized. The updated fiscal plan reflects the impact of the revised revenue forecast. According to the Revenue Stabilization Fund (RSF) law (MCC 20-68) adopted by the Council in June 2010, the mandatory contribution to the RSF must be the greater of 50 percent of excess revenues or 0.5 percent of AGR. Under this law, $28.8 million must be contributed to the RSF in FY19.

The fiscal plan projects total reserves to be 6.9 percent of AGR at the end ofFY18, less than the 8.9 percent established as the policy target for FYl 8 and reflected in the approved fiscal plan. This reduction is due primarily to the FYl 8 revenue shortfall of $95 million and a set-aside for snow removal costs in the amount of $15 million. Absent any corrective action, this FY18 budget gap would reduce the General Fund reserve to just under $40 million, and total reserves (including the RSF) would be below the agreed to policy level of 8.9 percent.

The fiscal plan assumes that in FY 19 and beyond, the General Fund reserve will be funded at the Charter limit and contributions to the RSF will be made consistent with the County's fiscal policies and RSF law. Total reserves are projected to increase to 10 percent by FY20 in accordance with the County's fiscal policies.

Stephen B. Farber, Council Administrator, County Council December 6, 2017 Page4

Looking Ahead

As you know, the County Executive will update the fiscal plan in March as part of his Recommended FY19 Operating Budget and FY19-24 Public Services Program. The March update will include several changes that are not part of the attached fiscal plan because the information _is currently not available or is dependent on events that will occur subsequent to this transmittal, including:

1. The County Executive's recommendations for the FY19-24 CIP and the FY19 Operating Budget.

2. The results of the FY 18 Savings Plan. 3. The mid-December update by the State Board of Revenue Estimates on its economic

forecast. 4. The February 2018 income tax distribution and data on the County's excise taxes for

November 2017 through February 2018. 5. Revisions to estimates of the assessable base by the State Department of Assessments and

Taxation expected in January 2018. 6. Federal and State budget decisions that may affect the County's budget.

In summary, the fiscal plan reflects a significant shortfall in anticipated resources for FY18 and FY19. Immediate action must be taken to address this near-term shortfall, and continued restraint in spending plans will be needed to maintain the fiscal health of the County going forward.

JAH:jn

Attachments

c: Timothy L. Firestine, Chief Administrative Officer Alexandre A. Espinosa, Director, Department of Finance Bonnie Kirkland, Assistant Chief Administrative Officer Department Heads and Office Directors Management and Leadership Service Employees Gino Renne, President UFCW Local 1994 Jeff Buddle, President, International Association of Fire Fighters, Local 1664 Torri Cooke, President, Fraternal Order of Police, Lodge 35

®

App/Proj Esl/Proj 12-12-17 Total Revenues

Property Tax 1,no.2 1,769.3 2.3% 2.4% 1,811.5 3.4% 1,873.4 3.1% 1,930.6 3.2% 1,992.1 3.3% 2,057.4 3.2% 2,124.1 2 Income Tax 1,557.9 1,479.1 0.7% 6.1% 1,569.0 6.3% 1,668.5 4.3% 1,740.9 3.8% 1,807.1 4.3% 1,884.8 4.9% 1,976.9 3 Transter/Recordation Tax 170.4 167.9 0.3% 1.8% 170.9 -1.6% 168.2 --0.3% 167.6 4.5% 175.1 5.7% 185.1 8.3% 200.5 4 OlherTaxes 282.5 269.7 -3.8% 0.8% 271.9 0.8% 274.0 0.7% 276.0 0.3% 276.8 0.2% 277.3 0.2% 2TT.9 5 Olher Revenues 1,052.5 1,052.6 0.1% 0.1% 1,054.0 -0.3% 1,051.0 0.1% 1,052.3 0.5% 1.057.3 0.4% 1,061.7 0.2% 1,064.3 6 Total Revenues 4,833.5 4,738.6 0.9% 2.9% 4,8TT.3 3.2% 5,035.0 2.6% 5,167.2 2.7% 5,308.4 3.0% 5,466.2 3.2% 5,643.7 7 8 Net Transfers In !Out) 34.3 34.3 -48.8% -48.8% 17.6 2.4% 18.0 2.6% 18.4 2.5% 18.9 2.5% 19.4 2.5% 19.9 9 Total Revenues and Transfers Available 4,867.8 4,TT2.9 0.6% 2.6% 4,894.9 3.2% 5,063.0 2.6% 5,185.7 2.7% 5,327.3 3.0% 5,485.6 3.2% 5,663.6 10 11 Non-Operating Budget Use of Revenues 12 Debt Service 399.9 399.9 5.2% 5.2% 420.8 4.3% 439.0 4.5% 458.6 2.9% 472.1 3.1% 486.7 0.0% 486.7 13 PAYGO 34.0 34.0 0.0% 0.0% 34.0 0.0% 34.0 0.0% 34.0 0.0% 34.0 0.0% 34.0 0.0% 34.0 14 GIP Current Revenue 66.2 66.2 47.7% 47.7% 97.7 -23.0% 75.3 12.7% 84.8 -7.6% 78.3 0.0% 78.3 0.0% 78.3 15 Change In Other Reserves -42.2 -42.2 100.8% 100.8% 0.3 -38.7% 0.2 -4.9% 0.2 1.8% 0.2 5.6% 0.2 4.0% 0.2 16 Contnbution to General Fund Undesignated Reserves 6.4 -103.0 1870.5% 222.6% 126.3 -94.4% 7.1 2.5% 7.3 -19.6% 5.9 3.3% 6.1 13.3% 6.9 17 Contribution to Revenue StabUlzation Reserves 27.7 27.2 3.9% 5.7% 28.8 -25.3% 21.5 -61.4% 8.3 8.4% 9.0 11.1% 10.0 3.0% 10.3 18 Set Aside for other uses (supplemental appropJiations) 0.0 15.0 n/a 33.3% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 19 Total Other Uses of Resources 492.0 397.1 47.9% 83.3% 7'IT.9 -18.0% 597.1 2.7% 613.2 1.0% 619.5 2.6% 635.3 0.2% 636.4

20 Available to Allocate to Agencies (Total Revenuas+Net 4,375.B 4,375.8 -4.8% -4.8% 4,167.0 6.9'.,{, 4A56.0 2.&•4 4,572.5 3.0% 4,707.8 3.0% 4,850.3 3.6% 5,027.1 Transfe,s..Total Olher Uses) 21 22 Agency Uses 23 24 Montgomery County Public Schools (MCPS) 2,368.7 2,368.7 .0.1% --0.1% 2,366.6 25 Montgomery College (MC) 262.8 262.8 -1.1% -1.1% 259.9 26 MNCPPC (w/o Debt Service) 125.9 125.9 -11.7% -11.7% 111.2 27 MCG 1,618.5 1,618.5 -11.7% -11.7% 1,429.4

28 Agency Uses 4,375.8 4,375.8 -4.8% -4.8% 4,167.0 6.9% 4,456.0 2.6% 4,572.5 3.0% 4,707.8 3.0% 4,850.3 3.6% 5,0'IT.1

29 Total Uses 4,867.8 4,TT2.9 0.6% 2.6% 4,894.9 3.2% 5,063.0 2.6% 5,185.7 2.7% 5,327.3 • 3.0% 5,485.6 3.2'4 5,663.6

30 (Gap)/Available 0.0 0.0 0.0 0.0 0.0 o.o o.o o.o

Assumptions: 1. Property taxes are at the Charter Limit with a $692 credit. Other taxes are at current rates. 2. Reserve contributions are consistent with legal requirements and the minimum policy target 3. PAYGO, debt service, and current revenue reflect the Amended FY17-22 Capital Improvements Program. 4. State Aid, including MCPS and Montgomery College, is not projected to increase from FY19-24. 5. Projected FY19 allocations for MCPS and Montgomery College assume funding at maintenance of effort The allocations do not indude potential increases to State Aid or other possible agency resources, such as use of additional fund balance. Additional State Aid or use of fund balance would increase the rate of growth for MCPS and Montgomery College.

e

App. Est. %Chg. %Chg. Projected %Chg. Projected %Chg. Projected %Chg. Projected -

%Chg. Projected - %Chg. Projected FY18 FY18 FY18-19 FY18--19 FY19 FY19-20 FY20 FY20-21 FY21 FY21-22 FY22 FY22-23 FY23 FY23-24 FY24 31 Begjnning Reserves

32 Unrestricted General Fund 142.8 142.8 -72.2% -72.2% 39.8 317.7% 166.0 4.3% 173.1 4.2% 180.4 3.2% 186.3 3.2% 192.3 33 Revenue Stabilization Fund 280.4 280.4 9.7% 9.7% 307.6 9.4% 336.4 6.4% 357.9 2.3% 3662 2.5% 375.2 2.7% 385.2 34 Total ResRrves 423.2 423.2 -17.9% -17.9% 347.4 44.6% 502.4 5.7% 531.0 2.9% 546.6 2.7% 561.5 2.9% 577.5 35 36 Additions to Reseryes 37 Unrestricted Generlll Fund

I 6.4, -103.01 1870.5% 222.6% 126.31 -94.4%

7.11 2.5%

7.31 -19.6%

5.91 3.3%

6.11 13.3% 6.9

38 Revenue Stabilization Fund 27.7 27.2 3.9% 5.7% 28.8 -25.3% 21.5 -61.4% 8.3 8.4% 9.0 11.1% 10.0 3.0",!, 10.3 39 Total Change in Reserves 34.1 -75.8 354.8% 304.5% 155.0 -81.6% 28.6 --45.5% 15.6 --4.7% 14.9 8.0% 16.1 6.9% 17.2 40

41 Ending Reserves 42 Unrestricted Generlll Fund 149.2 39.8 11.3% 317.7% 166.0 4.3% 173.1 4.2% 180.4 3.2% 186.3 3.2% 192.3 3.6% 1992 43 Revenue Stabilization Fund 308.1 307.6 9.2% 9.4% 336.4 6.4% 357.9 2.3% 366.2 2.5% 375.2 2.7% 385.2 2.7% 395.5 44 Total Reserves 457.3 347.4 9.9% 44.6% 502.4 5.7% 531.0 2.9% 546.6 2.7% 561.5 2.9% 577.5 3.0% 594.7

45 Reserves as a % of Adjusted Governmental Revenues 8.9'¼ 6.9% 9.7% 10.0% 10.0% 10.0% 10.0% 10.0%

46 Other Reserves 47 Montgomery College

I 4.61 4.61

0.0% 0.0% 4.61

0.0% 4.61

0.0% 4.61

0.0% 4.61

0.0% 4.61

0.0% 4.6 4B M-NCPPC 5.0 5.0 5.2% 5.2% 5.3 3.4% 5.4 3.0% 5.6 3.1% 5.8 3.2% 6.0 3.2% 6.2 49 MCPS 0.0 0.0 rJa rJa 0.0 n/a 0.0 rJa 0.0 n/a 0.0 nla 0.0 n/a 0.0 50 MCG Special Funds 0.7 0.7 11.3% 11.3% 0.8 4.3% 0.9 4.2% 0.9 32% 0.9 3.2% 1.0 3.6% 1.0

51 I MCG + Agency Reserves as a % of Adjusted Govt Revenues I 9.1%1 7.1%1 9.9%1 1D.2"/,I 1D.2%1 10.2%1 10.2"J.I 10.2%

52 Retiree Health Insurance Pre-Funding

53 Montgome,y County Pubffc Schools (MCPS) 74.2 74.2 79.4 88.7 96.8 103.7 105.0 105.0 54 Montgome,y College (MC) 2.6 2.6 2.8 3.0 3.1 3.3 3.3 3.3 55 MNCPPC 2.1 2.1 1.8 1.7 1.5 1.4 1A 1.4 56 MCG 43.4 43.4 43.6 47.0 50.2 53.4 51.9 51.9' 57 Subt<>tal Retiree Health lnsurllnce Pre-Funding 122.2 122.2 127.6 140.4 151.6 161.9 161.7 161.7

58 Adjusted Govemmental Revenues

59 Total Tax Supported Revenues 4,833.5 4,738.6 0.9% 2.9% 4,877.3 3.2"/, 5,035.0 2.6% 5,167.2 2.7% 5,308.4 3.0% 5,466.2 3.2% 5,643.7 60 Capital Projects Fund 176.0 176.0 0.5% 0.5% 176.9 -16.3% 148.1 4.1% 154.1 4.2% 160.6 0.0% 160.6 0.0% 160.6 61 Grllnts 117.4 117.4 2.3% 2.3% 120.1 2.4% 122.9 2.5% 126.0 2.5% 129.1 2.5% 132.3 2.5% 135.6 62 Total Adjusted Governmental Revenues 5,126.9 5,032.0 0.9% 2.8% 5,174.4 2.5% 5,306.0 2.7% 5,447.3 2.8% 5,598.1 2.9% 5,759.2 3.1% 5,940.0

e

KEY REVENUE App. Estimate %Chg. %Chg. - Projected '¼ Chg. -

Projected %Chg~ Projected '¼ Chg. - -Projected '¼ Chg. Projected ~ Chg. Projected CATEGORIES FY18 FY18 FY18-19 FY18-19 FY19 FY19-20 FY20 FY2D-21 FY21 FY21-22 FY22 FY22-23 FY23 FY22-23 FY24 TAXES 5-25-17 12-12-17 App/Proj Est/Proj 12-12-17 1 Property Tax 1,770.2 1,769.3 2.3% 2.4% 1,811.5 3.4% 1,873.4 3.1% 1,930.6 3.2% 1,992.1 3.3% 2,057.4 3.2% 2.124.1 2 Income Tax 1,557.9 1,479.1 0.7% 6.1% 1,569.0 6.3% 1,668.5 4.3% 1,740.9 3.8% 1,807.1 4.3% 1,884.8 4.9% 1.976.9 3 Transfer Tax 114.3 112.6 0.3% 1.8% 114.7 -1.6% 112.8 -0.3% 112.5 4.2% 117.2 5.9% 124.2 8.3% 134.4 4 Recordation Tax 56.2 55.3 0.2% 1.8% 56.3 -1.7% 55.3 -0.5% 55.0 5.2% 57.9 52% 60.9 8.5% 66.1 5 Ene,-gyTax 204.3 192.1 -6.0% -0.1% 192.0 0.0% 192.0 0.0% 192.0 0.0% 192.0 0.0% 192.0 0.0% 192.0 6 Telephone Tax 52.5 51.8 1.8% 3.3% 53.5 3.1% 55.1 2.6% 56.5 0.5% 56.8 0.0% 56.8 0.0% 56.8 7 Hotel/Motel Tax 21.9 21.8 1.5% 1.9% 22.3 1.8% 22.7 1.8% 23.1 1.8% 23.5 1.7% 23.9 1.7% 24.3 8 Admissions Tax 3.3 3.5 8.8% 3.2% 3.6 3.3% 3.7 3.3% 3.8 3.3% 3.9 3.3% 4.1 3.3% 4.2 9 E-Cigarette Tax 0.4 0.5 26.4% 3.8% 0.5 3.7% 0.5 3.5% 0.6 3.4% 0.6 3.3% 0.6 32% 0.6 10 Total Local Taxes 3,781.0 3,686.0 1.1% 3.7% 3,823.3 4.2% 3,984.0 3.3% 4,115.0 3.3% 4,251.1 3.6% 4,404.6 4.0% 4,579.4

INTERGOVERNMENTAL AID 11 Highway User 3.7 3.7 2.6% 1.5% 3.8 0.0% 3.8 0.0% 3.8 0.0% 3.8 0.0% 3.8 0.0% 3.8 12 Pofice Protection 14.7 14.7 0.0% 0.0% 14.7 0.0% 14.7 0.0% 14.7 0.0% 14.7 0.0% 14.7 0.0% 14.7 13 Libraries 6.3 6.3 0.0% 0.0% 6.3 0.0% 6.3 0.0% 6.3 0.0% 6.3 0.0% 6.3 0.0% 6.3 14 Health Services Case Formula 4.6 4.6 0.0% 0.0% 4.6 0.0% 4.6 0.0% 4.6 0.0% 4.6 0.0% 4.6 0.0% 4.6 15 Mass Transit 39.5 39.5 0.0% 0.0% 39.5 0.0% 39.5 0.0% 39.5 0.0% 39.5 0.0% 39.5 0.0% 39.5 16 Public Schools 679.1 679.1 0.0% 0.0% 679.1 0.0'/4 679.1 0.0% 679.1 0.0% 679.1 0.0% 679.1 0.0% 679.1 17 Community College 35.8 35.8 0.0% 0.0% 35.8 0.0% 35.8 0.0% 35.8 0.0% 35.8 0.0% 35.8 0.0% 35.8 18 Other 59.0 59.0 -6.3% -6.3% 552 -15.0% 46.9 -8.9% 42.7 0.0% 42.7 0.0% 42.7 0.0% 42.7 19 Total Intergovernmental Aid 842.6 842.6 -0.4% --0.4% 838.9 -1.0% 830.6 -0.5% 826.5 0.0".4 826.5 0.0% 826.5 0.0% 826.5

FEES AND FINES 20 Licenses & Permits 12.9 12.9 1.5% 1.5% 13.1 1.5% 13.3 1.5% 13.5 1.5% 13.7 1.5% 13.9 1.5% 14.1 21 Charges for Services 70.3 70.3 1.8% 1.8% 71.6 1.9% 72.9 2.0% 74.3 2.0% 75.8 2.0% 77.3 2.0% 78.9 22 Fines & Forfeitures 28.7 28.7 1.6% 1.6% 29.1 1.6% 29.6 1.6% 30.1 1.6% 30.6 1.6% 31.0 1.6% 31.5 23 Montgomery College Tuition 80.4 80.4 1.8% 1.8% 81.9 1.9% 83.4 2.0% 85.1 2.0% 86.8 2.0% 88.5 0.0% 88.5 24 Total Fees and Fines 192.2 192.2 1.8% 1.8% 195.7 1.8% 199.2 1.9% 202.9 1.9% 206.8 1.9% 210.8 1.1% 213.0

MISCELLANEOUS 25 Investment Income 4.0 4.0 34.9% 34.9% 5.4 25.6% 6.8 20.3% 8.1 10.1% 9.0 0.0% 9.0 0.0% 9.0 26 Other MisceUaneous 13.7 13.7 2.3% 2.3% 14.0 2.4% 14.4 2.5% 14.7 2.5% 15.1 2.5% 15.5 2.5% 15.9 27 Total Miscellaneous 17.7 17.7 9.7% 9.7% 19.4 8.8% 21.1 8.2% 22.9 5.2% 24.1 1.6% 24.4 1.6% 24.8 28 TOTAL REVENUES 4,833.5 4,738.6 0.9% 2.9% 4,877.3 3.2% 5,035.0 2.6% 5,167.2 2.7% 5,308.4 3.0% 5,466.2 3.2% 5,643.7

Calculation for Adjusted Governmental Revenues

29 Total Tax Supported Revenues 4,833.5 4,738.6 0.9% 2.9% 4,8TT.3 3.2% 5,035.0 2.6% 5,167.2 2.7% 5,308.4 3.0% 5,466.2 3.2% 5,643.7 30 Capital Projects Fund 176.0 176.0 0.5% 0.5% 176.9 -16.3% 148.1 4.1% 154.1 4.2% 160.6 0.0% 160.6 0.0% 160.6 31 Grants 117.4 117.4 2.3% 2.3% 120.1 2.4% 122.9 2.5% 126.0 2.5% 129.1 2.5% 132.3 2.5% 135.6 32 MCG Adjusted Revenues 5,1_~6.9 _ 5,032.~_ 0.9% 2.8% 5,174.4 ___ 2.5% 5,306.0 2.7% 5,447.3 2.8% ~598.1 2.9%~~-~759.2 3.1% 5,940.0

G)

Montgomery County, Maryland

DECEMBER 2017 REVENUE UPDATE AND SELECTED ECONOMIC INDICATORS Department of Finance

December 12, 2017

MC Department of Finance December 2017 Economic and Revenue Update @

Overview

• Finance provides a full revenue update in December of each year, after the November income tax distribution

• At this time, near final data about the prior year income tax receipts are known, and updates are available to certain economic factors

• Another full update is done for the March budget

MC Department of Finance December 2017 Economic and Revenue Update G)

ECONOMIC OUTLOOK - SUMMARY

MC Department of Finance December 2017 Economic and Revenue Update @)

Signs of a Continued Economic Growth - A drop in unemployment rate from 3.4 percent in

October 2016 to 3.1 percent in October 2017, an increase in resident employment estimated for CY17 (j2.0°/o), and an estimated increase in wage and salary income in CY17 (j4.1°/o) that follows an increase of 4.2 percent in CY16.

- Payroll employment is expected to increase 1.9 percent in CY17 that follows a 0.9 percent increase in CY16.

- Sales of existing homes are expected to increase 0.1 percent in CY17 after increasing 5.8 percent in CY16.


INFLATION I 1.73% Property Taxes Key determinant of property I 2016: 1.18%

Sept. 2017 tax revenues at the Charter Limit

UNEMPLOYMENT 3.1% Income Taxes Indicates overall health of 3.4%

RATE Oct. 2017 the job market Oct. 2016

RESIDENT 551,245 Income Taxes Primary determinant of 537,128

EMPLOYMENT Oct. 2017 income tax receipts Oct. 2016

PAYROLL 466,414 Income Taxes Another determinant of 460,384

EMPLOYMENT Mar. 2017 income tax receipts Mar. 2016

(QCEW Data)

STOCK MARKET - 2,647.58 Income Taxes Key determinant of capital

I 2,198.81

S&P 500 Nov. 30, gains portion of the income Nov 30, 2016 2017 tax

HOME SALES I 985 Transfer/ Indicates activity affecting 1,002

Oct. 2017 Recordation Taxes receipts Oct. 2016

HOME PRICES $398,000 Transfer/ Taxes are based on values, $403,488

(Median Price Sold) Oct. 2017 Recordation Taxes affects amount of taxes Oct. 2016 collected

FEDERAL FUNDS RATE .

1.16% Investment County's return on 0.41%

Nov. 2017 Income investments closely Nov. 2016 correlated with the Fed Funds

MC Department of Finance December 2017 Economic and Revenue Update

Department of Finance estimates that the County's resident employment will reach 543,900 in CY17 (j2.0%) over CY16. On a year-over-year basis, resident employment increased by over 14,000 from October 2016 to October of this year.

550.0

540.0

530.0

- 520.0 fl.)

= = 510.0 e I -= 500.0

~ a s 490.0

I 480.0

470.0

460.0

Total Resident Employment (Montgomery County)

------'I:····,,, _ _ ~ 543.9 ~

2008 2009 2010 2011 2012 2013

Calendar Year

SOURCES: Bureau of Labor Statistics, U .S. Department of Labor Montgomecy County Department of Finance

2014 2015 2016 2017 est.


The Department of Finance estimates that the County's unemployment rate will decline to 3.1 percent in CY17- a ten-year low. The unemployment rate in October was 3.1 percent compared to 3.4 percent in October 2016.

6.0%

5.0%

~ ~ 4.0% -= ~

8 3.0% ..... 0

15. ~ 2.0% ;§

1.0%

0.0% 2008 2009 2010

Unemployment Rate (Montgomery County)

2011 2012 2013

Calendar Year

2014

SOURCES: Bureau ofLabor Stat istics, U. S. Departmentof Labor Montgomery County Department of Finance


• ~ 3.1% ~

• - - --

2015 2016 2017 est.

@

Inflation increased 1.73 percent in September 2017. Overall for the Washington-Baltimore consolidated region, the CPI has increased 1.17 percent for the calendar year ending in September. For calendar year 2016, the index increased a modest 1.18 percent compared to 0.33 percent in CY15.

5.00%

4.50%

4.00%

3.50%

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%

Annual Percent Change in Washington-Baltimore CMSA Consumer Price Index

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 est. Calendar Year


Home sales are estimated to increase 0. 1 percent this year. Total sales of existing homes increased 11.1 percent in CY15 and increased 5.8 percent in CY16.

14,000

12,000

10,000 (/) Q) ca a,ooo

en ~ 6,000 C: C: <( 4,000

2,000

0 2008 2009

EXISTING HOME SALES (Montgomery County)

2010 2011 2012 2013

Calendar Year

SOURCES: Metropolitan Regional Information System, Inc . Montgomery County Department of Finance

2014


2015 2016 2017 est.

@

Median home sales prices are expected to increase 2.2 percent in CY17 following an increase of 2.4 percent in CY16.

Median Home Sales Price Montgomery County

$450,000 --------------------------------------------.

$400,000

$350,000

$300,000

-~ $250,000 ~

c $200,000 ~

:a ~ $150,000

$100,000

$50,000

$0

2008 2009 2010 2011 2012 2013 2014

Calendar Year

SOURCES: Metropolitan Regional Infonnation System, Inc. Montgomery County Department of Finance


2015 2016 2017 est

@

REVENUE UPDATE

MC Department of Finance December 2017 Economic and Revenue Update @) ..

FY18 and FY19 Summary

The outlook for the remainder of this fiscal year (FY18) and next year (FY19) suggests a decline in revenues over the two-year period compared to the estimates prepared for the FY18 budget. This decrease is mainly attributed to revisions to income tax, property tax, transfer-recordation tax, and fuel-energy tax revenues. The combined decrease of all tax-supported revenues in FY18 and FY19 is nearly $181.0 million lower than previously estimated.


Revenue Update December revised revenues for FY18 are $94.9 million below the FY18 Budget estimates. The major contributors are the estimated decreases in the income tax, transferlrecordation tax, and fuelenergy tax revenues.

FY18 BUDGET - DECEMBER 2017 UPDATE ($MIL.) FY18 Budget Dec. Update Difference

Income $1,557.887 $1,479.083 ($78.805) Property $1,770.152 $1,769.271 ($0.881) Transfer/Recordation $170.437 $167.894 ($2.542) Other Taxes: --Admissions $3.290 $3.469 $0.179 --Fuel/Energy $204.333 $192.147 ($12.186) --Telephone $52.504 $51.783 ($0.721) --Hotel/Motel $21.938 $21.849 ($0.089) Investment Income n.a n.a n.a Highway User Revenue $3.702 $3.742 $0.039 E-Cigarettes $0.412 $0.502 $0.090 TOTAL $3,784.655 $3,689.739 ($94.916)


Revenue Update December revised revenue estimates for FY19 are $86.0 million below the FY18 Budget estimates. The decrease is attributed to weaker income, property, transfer-recordation, and fuel-energy tax revenues.

FY18 BUDGET - DECEMBER 2017 UPDATE ($MIL.) FY19 Estimate Dec. Update Difference

Income $1,623.341 $1,569.027 ($54.314) Property $1,824.952 $1,811.454 ($13.498) Transfer/Recordation $174.636 $170.927 ($3. 709) Other Taxes: --Admissions $3.396 $3.580 $0.184 --Fuel/Energy $206.057 $192.029 ($14.028) --Telephone $54.051 $53.469 ($0.582) --Hote I/Mote I $22.511 $22.266 ($0.245) Investment Income n.a n.a n.a Highway User Revenue $3.719 $3.799 $0.080 E-Cigarettes $0.430 $0.521 $0.091 TOTAL $3,913.092 $3,827.071 ($86.021)


Income Tax Volatility Year-over-year percent changes in the income tax are volatile and highly sensitive to economic events such as recessions, changes in local, state, and federal tax rates, and capital gains.

30 .0%

25.0%

20 .0%

15.0%

10.0%

C, 5.0% .c

0 10.1% .... (.)

0.0% 0..

-5 .0%

-10.0%

-15.0%

-20.0% 0 ...... (J) (J) (J) (J) ...... ......

Annual Percent Change in Income Tax Revenues from Withholdings, Estimated Payments, October 15 Filings, and Revenue Adjustments

N M (J) (J) (J) (J) ...... ......

Beginning of Three-year Stock Market Decline and Recession

'<:I" LO co I'- 00 (J) 0 ...... (J) (J) a> (J) (J) (J) 0 0 (J) (J) a> (J) (J) (J) 0 0 ...... ...... ..- ...... ...... ...... N N

N 0 0 N

24 .0 %

--------<

Stock Market Collapse and "Great Recession"

M '<:I" LO co I'-0 0 0 0 0 0 0 0 0 0 N N N N N

Tax Year

Rate increase from 2.95% to 3.2%

00 (J) 0 ...... N M '<:I" LO 0 0 ...... ...... ...... ...... ...... ...... 0 0 0 0 0 0 0 0 N N N N N N N N


ui Q)

co ...... 0 N

@

Income Tax - ''It is all about the November distribution''.

• The largest share (five year average of 81.2%) of the County's income tax revenues for any tax year comes in quarterly distributions of withholdings and estimated payments.

• The November distribution reflects actual results from the prior tax year (e.g., final tax year 2016 in November 2017) and provides a near final review of last year's tax liability - this provides a base for future projections.

• The State Comptroller's Office also adjusts its distribution formula for the current fiscal year based on the prior tax year results (e.g., 2016 tax year final results affect quarterly distributions for this fiscal year starting in November).

• Income tax revenues represented 46.1 percent of total General Fund tax revenues in FY17 and 44.1 percent of the County's total General Fund revenues.


Income Tax - November distributions

Actual Actual Actual Estimated Actual

(millions) FY15 FY16 FY17 FY18 FY18 -

October 15th Filings and Adjustments -- -$79.13 $76.80 $135.35 $156.73 $95.53 - -

Withholding and Estimated payments - --for 3rd Quarter $261.64 $271.10 $288.73 $303.74 $283.20 - -

- --Total November Distribution $340.77 $347.90 $424.08 $460.47 $378.73 -- -

•Decrease in receipts from October 15th Filings and Adjustments is based on an adjustment to reflect final income tax receipts due the County for tax year 2016 as compared to tax year 2015.

Difference Actual/Estimate

FY18

($61.20)

($20.54)

($81.74)

•Decrease of 1.9% in distributed withholdings and estimated payments compared to last year is due to a decrease in income tax collections statewide from November 2016 to November 2017 and a change in the distribution formula, which is updated by the State in November to reflect the County's final TY2016 tax receipts.


Income Tax - Economic Factors

Resident employment is expected to increase 2.0 percent in CY17 and increase 1.0 percent in CY18. Personal income is estimated to increase 4.2 percent in CY17 and 4.8 percent in CY18. Those increases are below the March assumptions of 4.6 percent in CY17 and 5.2 percent in CY18.

- Wage and salary income is expected to increase 4.1 percent in CY17 and increase 4.7 percent in CY18. Both increases are below the March 2017 economic assumptions.

- The revisions are based on the Bureau of Revenue Estimates' (Comptroller of Maryland) September forecasts.


Income Tax The amount of revenues from the November distribution has been correlated to the stock market (S&P 500 Index) with the exceptions of 2013 (fiscal cliff) and 2016.

November-January Distributions from October 15 Filings and Adjustments and the S&P 500 Index

$250.000 ..--------------------------------------..... 2500

$200.000

U) 5 $150.000 ;; :I .0 $100.000 'i: .. U)

0 $50.000

$0.000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

est Tax Year

-Nov.Dist - s&P500 Year-End Close


2000

1500

1000

500

0

~ "C .E 0

~ Q. o!I 11'

@

Property Tax

• The inflation rate is expected to be 1.20 percent in calendar year 2017 and well below the 2.20 percent assumed in the FY18 Approved Budget. Since the previous inflation rate of 2.20 percent was used to derive the property tax revenues at the Charter Limit for FY19, the lower rate of 1.20 percent will reduce the estimated tax revenues for FY19 at the Charter Limit.

• The reassessment rates for real property for Group Three for fiscal year 2018 will be released by the Maryland State Department of Assessments and Taxation (SDAT) at the end of December. Preliminary indications are that this group will experience an increase in the real property tax base.


Transfer and Recordation Taxes

- Home sales are expected to increase 0.1 percent in CY17 and median prices are estimated to increase 2.2 percent. Based on transfer tax collections to date, the residential real estate market is estimated to experience a modest growth in FY18 albeit below FY18 budget estimates and collections from the non-residential real estate market are estimated to decline in FY18.

- Because of the estimated increases of home sales in CY17 and CY18, Finance estimates that the number of residential transfers increases 1.1 percent in FY18.

- Total transfer tax revenues on residential transactions are expected to increase 3.8 percent in FY18.

- Reflecting the General Fund rate cut in the recordation tax effective September 1, 2016, total recordation tax revenues are expected to be $55.3 million in FY18.


Transfer and Recordation Taxes Since reaching an all time high of $241. 7 million in FY06, transfer and recordation taxes declined to $127.3 million in FY12. With the cut in the tax rate in the General Fund portion of the recordation tax from $4.40 per $1,000 to $4.16 per $1,000, the transfer and recordation taxes for the General Fund are estimated to reach $204.5 million by FY24 - $37.2 million below the FY06 peak.

Transfer and Recordation Taxes: General Fund Only

ci, $250 ~===========--------------------------------t::: 1~1 i i i i ~,,.;,,.,.;,.,.;,.,.;,.,.;,.,.;,..~,7:;hl:;'IL;:1L;:17:;:1L;:1~..., -====------==========J I $100 ............... ............... .,,..,,,,,,,,,,,,,,,,....., ~ ~ I

~ $50

$0 FY17 FY18 est. FY19 est. FY20 Est. FY21 Est. FY22 Est. FY23 est. FY24 est.

Fiscal Year

DTransfer Tax r.l Recordation Tax


Other Tax Revenues Other tax revenues are estimated to increase 0.4 percent in FY18 over budget estimates due to estimated increased in telephone, hotel-motel tax, admissions, and e-cigarette tax revenues. Over the current two-year period (FY18-FY19), total other tax revenues are estimated to be $27 million below FY18 budget estimates largely attributed to the reduction in energy tax revenues.

Other Tax Revenues (Montgomery County)

$280 -------------------------------------------------- $278 ti) r:: $276 0 = $274

! $272

--;; $270 G)

~ $268

~ $266

~ $264

$262

$260

$258 FY15 FY16 FY17 FY18 est. FY19 est. FY20 Est. FY21 Est. FY22 Est. FY23 est. FY24 est.

Fiscal Year

NOTE: Other tax revenues include fuel-energy tax, telephone tax, hotel-motel tax, admissions tax, and e-cigarette starting in FY2016 .


Risks to Revenue Forecasts

- The impact on the County income tax revenues attributed to the changes to the federal income tax before Congress.

- A stock market contraction over the forecast period would affect the November reconciling income tax distribution and therefore total income tax revenues.

Inflation running below the economic assumptions that could affect property tax revenues at the Charter Limit.

Sales of existing homes and prices that could be affected by the rate changes in the recordation taxes and increases in ten year U.S. Treasury rate that would affect mortgage rates.

- A revised downward forecast of the state's economy by the Board of Revenue Estimates that would affect the economic assumptions.

Revisions to current County employment and income data by federal and state agencies.


I -


TO:

FROM:

SUBJECT:

OFFICE OF THE COUNTY EXECUTIVE ROCKVILLE, MARYLAND 20850

MEMORANDUM

November 30, 2017

Roger Berliner, Council President ,,-~~ ---·

Isiah Leggett, County Executive 4~ FY18 Savings Plan

-_ -_ -: : I , -_- _- -~-- -_ _-.

The purpose of this memorandum is to inform you that, due to a significant shortfall in available resources, I will be recommending a FYI 8 Savings Plan for all departments and agencies, as well as instituting other immediate cost saving measures.

The County's November income tax distribution was significantly below expectations, primarily driven by a nearly 30 percent decline in income tax revenue from taxpayers filing extensions for tax year 2016. According to the Maryland Comptroller's Office, other jurisdictions in the State are also experiencing similar reductions in their November reconciliation distributions. Fiscal year to date, the County's income tax revenue trails our forecast by $64 million. The Department of Finance (FIN) currently projects a total revenue shortfall of$95 million for FY18 across all revenue sources. In addition, the County's General Fund closed out FYI 7 about $25 million below expectations. Between the two, the operating budget is short nearly $120 million in resources assumed for FYI 8.

These revenue numbers contrast with economic indicators that suggest a more robust economy. This contrast bears further analysis, which FIN is conducting. However, discussions with State revenue officials indicate the estimates are accurate. Therefore, we cannot wait to act.

I am asking all Executive Branch Departments to identify savings of2.0 percent against their approved FY18 tax-supported budgets. Legislative and Judicial Branch departments are strongly encouraged to identify savings of 2.0 percent as well. I will also be asking that outside agencies take part in this effort. Furthennore, I am reinstating a position exemption process for all County government departments and expanding the existing procurement exemption process, as well as identifying current revenue savings in the capital budget

~ montgomerycountymd.gov/311 .... 240-773•3556 TTY

Roger Berliner, Council President November 30, 2017 Page2

I appreciate the difficulty of this circumstance, but given the revenue shortfalls we are experiencing, this action will be necessary to maintain the County's fiscal health. I hope we can work cooperatively to achieve the required level ofFY18 savings, as we've done in prior years.

You will receive my recommended FYI 8 Savings Plan in the coming days. I appreciate quick action by the Council. The earlier departments are able to implement savings plans, the less painful the necessary reductions are. As it stands now, given Council's recess calendar, I understand the Council will not act until their return in mid-January. This schedule will mean that County departments will have only five months to implement approved reductions. Thank you for your continued partnership as we work toward the best outcomes for our residents.

IL:jn

c: County Councilmembers Timothy L. Firestine, Chief Administrative Officer Jennifer A. Hughes, Director, Office of Management and Budget Alexandre A. Espinosa, Director, Department of Finance Steve Farber, Council Administrator

I I i I !

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• .. , __ .J·.·.·.· :· __ .... ;··•.·. • .:.,•."·_;i_;.::.:.:..~ .• :•1 L'.·~~--·- .. " •


···-· ·--·-·· .:: __ :,::···_.:: __ :.:...c.__L___:,:.:,.,

OFFICES OF THE COUNTY EXECUTIVE

MEMORANDUM

November 30, 2017

TO: Executive Branch Department and Office Directors

-._. __ ":-·.:_:: ·.·.· .... _.·-... c:.;;:.-'.: ·, --~-·. ·_ ...

Timothy L. Firestine Chief Administrative Officer

FROM·. . h L . . Ch. fAdm. . . . Offi /?j~ fl, l. i'J/4nf;,vl!-T1mot y . Frrestme, 1e m1strat1ve 1cer ' ' J

SUBJECT: FYl 8 Savings Plan

This memorandum is to inform you that, due to shortfalls in anticipated revenues, a savings plan will be required to reduce expenditures for FY18.

The County's November income tax distribution was significantly below expectations, primarily driven by a nearly 30 percent decline in income tax revenue from taxpayers filing extensions for tax year 2016. According to the Maryland Comptroller's Office, other jurisdictions in the State are also experiencing similar reductions in their November reconciliation distributions. Fiscal year to date, the County's income tax revenue trails our forecast by $64 million. The Department of Finance (FIN) currently projects a total revenue shortfall of $95 million for FY18 across all revenue sources. In addition, the County's General Fund closed out FYI 7 about $25 million below expectations. Between the two, the operating budget is short nearly $120 million in resources assumed for FY18.

These revenue numbers contrast with economic indicators that suggest a more robust economy. This contrast bears further analysis, which FIN is conducting. However, discussions with State revenue officials indicate the estimates are accurate. Therefore, we cannot wait to act.

I am asking all Executive Branch Departments to identify savings of2.0 percent from their current FY18 tax-supported budgets. The Liquor Fund and the Cable Fund, which contribute to the General Fund, will also take reductions of2.0 percent. In the coming days, the Office of Management and Budget will provide information to all departments on the process for identifying savings plan initiatives for the review and approval of the County Executive.

As a further measure to reduce FYl 8 expenditures, a position exemption process will be instituted, effective immediately, for all departments. Also, the County's existing procurement exemption process will be expanded to include review of non-construction CIP procurements over $50,000. I fully appreciate the challenges that these controls will present, but considering the revenue shortfalls, these actions will be necessary to maintain the County's fiscal health.

101 Monroe Street • Rockville, Maryland 20850 240-777-2500 • 240-777-2544 TTY • 240-777-2518 FAX

www.montgomerycountymd.gov

-·- .. ·1

',

I

i '·

. ··::_._;· ____ ,;_;_· _ _;__:._ __ ·:_·_·.,

Executive Branch Department and Office Directors November 30, 2017 Page2

.. -·-,, ,:;;-~-,. · 1 . ·. -_-_-_- __ ·:~:c :,. ·_-.i • __ : -. -,: .. : ..

Please note that decisions related to the FYl 9 Operating Budget and the FYI 9-24 Capital Improvements Program will also need to be made in the context of the current fiscal situation. Shortfalls in revenue for FY18 will certainly impact FY19 revenue projections, and target reductions for FYl 9 budget development will most likely be revised in the coming weeks. I encourage departments to begin preparing additional FYl 9 target reduction options for consideration, with a focus on ongoing savings. We will need to continue to emphasize prioritization and conservatism as we work through another difficult budget development process.

Thank you for your cooperation and for your commitment to the residents of Montgomery County.

TLF:jn

c: Roger Berliner, President, Montgomery County Council Steve Farber, Council Administrator John McCarthy, State's Attorney Darren M. Popkin, Sheriff Judy Rupp, Court Administrator


TO:

FROM:

SUBJECT:

OFFICE OF MANAGEMENT AND BUDGET

MEMORANDUM

October 2, 2017

\ .

Jennifer A. ' : Director

Jennifer A. Hughes Director

All Departlmt Heads

FY19-24 Pu lie Services Program and FY19 Operating Budget Guidance

As we begin the process of developing the FYl 9 operating budget, we have been paying careful attention to the County's current fiscal environment. Currently, tax-supported revenues for FYI 9 are projected to increase by less than the known growth in obligations they will need to cover. These obligations include debt service, State-mandated Maintenance of Effort spending for MCPS and Montgomery College, retiree health insurance, employee compensation and benefits, and required reserve contributions. The approved fiscal plan for FYI 8-23 indicates that reductions to agency appropriations will be required just to meet these financial obligations. Furthermore, preliminary estimates for the end of FYl 7 suggest a lower than anticipated fund balance, which puts additional strain on the FYI 8 and FYI 9 budgets. With this in mind, we need to remain cautious and prudent in our spending plans. Unless economic factors improve significantly in updated forecasts later this year, difficult choices will need to be made to balance the budget next March.

I am releasing initial baseline budget targets to you today. Understanding that reductions will be necessary to balance the FY19 budget, the County Executive is requesting reductions of 1.5 percent for public safety departments, and reductions of 3.0 percent for all other tax-supported departments. These target reductions are already reflected in your Maximum Agency Request Ceiling (MARC), and should be submitted as part of your baseline budget. Budget submissions will be due by Thursday, November 9.

FY19 Maximum Agency Request Ceiling (MARC)

In developing the FYl 9 MAR Cs, 0MB carefully considered the factors identified during the Future Fiscal Impact (FFD review process. Generally, the MARCs include only maintenance-level adjustments, such as annualization of personnel costs, elimination of one-time

Office of the Director

101 Monroe Street, 14th Floor• Rockville,Maryland20850 • 240-777-2800 www.montgomerycountymd.gov

montgomerycountymd.gov / 311 240-773-3556 TTY

@

All Department Heads October 2, 2017 Page2

items, and other programmatic commitments that are specific and sufficiently defined. Executive branch department heads are required to submit budget requests no higher than the MARC specified in this memorandum. For legislative and judicial branch departments, the County Executive is requesting strong consideration of a similar approach in the preparation of your budget proposals. For self-supporting departments, fee increases are to be minimized consistent with adopted service levels and fund balance policy requirements. Please don't hesitate to reach out as needed to your 0MB analyst for additional guidance regarding your department's budget submission.

Several departments identified FFis for OMB's consideration that were not included in the MARCs. I want to assure you that we carefully reviewed your FFI submissions, and we have made note of those FFis that may require additional consideration later in the process. They were excluded from the MARCs for various reasons, including the need for additional analysis, or the expectation that more up-to-date information would be available later in the budget process.

MARC adjustments for compensation and benefits, motor pool, risk management, and other internal service rates are still under development and will be provided at a later date. If you use a rate model as part of your fiscal planning process, you may use increases equivalent to last year's for planning purposes until these rates are finalized.

Budget Submission Requirements

MARC-level budget submissions will be due to 0MB on Thursday, November 9. Target reductions are already reflected in the MARC amount. As you develop your budget submissions, your goal should be to identify the needed savings while minimizing adverse impacts on service delivery.

Competition List

Baseline budget submissions should not include competition list items, such as new initiatives, "wish list" items, or other expenditures not indicated as normally included within the MARC. Requests for additional resources may be considered later in the budget development process, as determined by the County Executive. At that time, 0MB will communicate any such decision and the process for reviewing these requests. We expect the primary focus of the budget process to be on preserving the current level of service in light of the increased level of funding needed to cover the County's fixed obligations. As always, please continue to work with your 0MB analyst to discuss issues, concerns, and pressures that could impact the FY19 operating budget.

Results Based Budgeting

Results-based budgeting remains an important priority of the County Executive and the Chief Administrative Officer. 0MB and CountyStat have deployed a shared data

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All Department Heads October 2, 201 7 Page 3

system, which makes it easier for you to provide performance data by eliminating duplicate data entry. In addition, the budget request system has been modified to capture more performancebased information, which will enable us to continue our progress in linking performance to resource allocation decisions. As part of the FY19 operating budget development process, 0MB and CountyStat will continue to solicit performance information with a focus on identifying the desired program outcomes associated with allocated resources. These efforts will allow us to foster budget discussions on the County's delivery of services and programs in the most costeffective manner. Resources on results-based budgeting are available on the eBudget Intranet site (https://omb.mcgov.org).

If you have any questions regarding your MARC or the budget submission process, please contact your 0MB budget analyst, PSP Manager Jelani Newton (240-777-2767), or me (240-777-2777). I look forward to working with you during the development of the County Executive's FYI 9 recommended operating budget.

JAH:jn

cc: Isiah Leggett, County Executive Timothy L. Firestine, Chief Administrative Officer Special Assistants to the County Executive Assistant Chief Administrative Officers Department ASCs or Equivalent Office of Management and Budget Staff

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Total RavenuH 1 Property Tax (le11 P01) 1,604.9 1,506.9 2.3% 1,538.9 2.5% 1,577.2 2.8% 1,821.1 2.8% 1,888.2 3.2% 1,720.1 3.0% 1,771.6

2 Income Tax 1,299.2 1,365.9 3.2% 1,340.8 9.9% 1,473.5 5.4% 1,663.5 5.4% 1,636.9 4.5% 1,710.6 3.2% 1,765.7

3 Tranafar/Rscotdatlon Tax 142.3 15U 12.9% 160.7 5.6% 189.6 8.4% 180.4 7.3% 193.8 7.7% 208.6 5.6% 220.0

4 Investment Income 0.2 0.3 130.7% 0.5 153.4% 1.3 49.4% 2.0 43.6% 2.8 39.5% 4,0 29,9% 5.2

Ii OlharTaxH 278.6 288.4 0.4% 277.7 1.4% 281.8 1.6% 286.0 1.8% 290,8 1.7% 296.6 1,8% 300.9

8 Other Revami•• 932.0 934.3 2.6% 955.8 -1.4% 942.7 0.4% 946.6 0.4% 950.8 0.4% 954.8 0.4% 958.7

7 Total Revenun 4,165.3 4,247.3 2.9% 4,274.3 4.0% 4,448.11 3.2"1. 4,189.7 3.3% 4,740.11 3.2% 4,8113,8 2,8% 8,021,11

8

" Net Tran1fe ... 1n 10ut1 38.4 37.7 12.ar. 43.3 -21.5% 34.0 2.6% 34.8 2.1% 35.8 U¾ 3U 2.3% 37.B

10 Total Rrtenu .. and Transr. ... Avalllbl• 4,193.7 4,285.0 3.0% 4,317.6 3.8% 4,479.11 3.2% 4,624.8 U% 4,776.6 3.2% 4,930.2 2.6% 1,019.4

11 12 Non-Operating Budget Un of RevenuH 13 Debt S.Nlc:e 313.3 305.5 9.8% 344.1 7.3% 369.4 5.7% 390.4 1.4% 395.8 3.9% 411.3 3.8% 426.2

14 PAYGO 29.6 29.5 1.5% 30.0 8.3% 32.5 0.8% 32.7 1.5% 33.2 0.0% 33.2 0.0% 33.2

15 CIP Curren! R1Yenu1 54.2 56.2 -9.0% 49.4 49.3% 73.7 -6.9% 68.B 5.1% 72.1 8.3% 78.0 -0.1% 78.0

18 Ch111111e In Montgomery College RNervN -8.3 -4.3 8.6% •7.6 100.0% 0.0 n/a o.o n/a o.o nta 0.0 n/a 0.0

17 Changa In MNCPPC R_rv .. -4.7 -4.3 2.8% -4.8 102.6% 0.1 0.3% 0,1 2.0% 0.1 16.6% 0.1 -4.6% 0.1

18 Changa In MCPS Re1ervn -27.0 -11.0 -41.5% · -38.2 100.0% 0.0 nta 0.0 n/a 0.0 nla 0.0 n/a 0.0

19 Change In MCG Special Fund Reaervea -6.6 -18.0 123.11% 1.8 -100.1% o.o 2014.11% 0.0 -36.4% 0.0 5.1% 0.0 -0.7% 0.0

20 Contribution to Genenil Fund Undaalgnat9d ReHIV91 -60.2 2.6 -53.1% ·92.2 99.4% -0.5 2014.9% 10.1 ·38.4% 6.4 5.1% 8.7 -0.7% 8.7

21 Contribution to Revenue Slablllzallon Reaen,ea 21.8 22.3 3.8% 22.6 3.7% 23.5 2.7% 24.1 3.1% 24.8 3.1% 25.6 2.6% 26.3

22 ReUree Heal\h lneurance Pre-Funding 138.0 138.0 -7.4% 127.8 -3.5% 123.4 -0.4% 122.9 0.0% 123.0 -4.3% 117.8 -4.4% 112.5

23 Sal A1ide for other UNI (1upplemental appropriation•) 0.1 -3.5 76.4% 0,1 15900.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0

24 Total Other u ... of R .. OUl'Cff 4&0.2 113,0 -3.8% 433.1 48.2% 842.0 4.2% 889.0 1.0"/. 671.1 2.1% 192.8 1.1% 703.0

25 AvaDable to Alloceta to AgenclH (Total RevenuH+Net 3,743.4 3,772.1 3.8% 3,884,6 -1.2•1. 3,837.8 3.1% 3,861.8 3.7% 4,101.2 3.3% 4,237.11 2.8% 4,318.4 Tranaf9•Tollll Other UHi)

2S 27 Ag1ncyUH1 26 29 Monlgomery County Publk: School• (MCPS) 2,084.3 2,089.8 2.6% 2,138.1

30 Montgomery Co11ge (MC) 228.5 221.0 7.0% 244.5

31 MNCPPC (W/0 Oabt Service) 104.7 104.7 8.9% 111.9

32 MCG 1 325.9 1376.6 4.8% 1 390.0 -

33 Ag1ncyu ... 3,743.4 3,772.1 3.8% 3,884.8 ~~: 3.1% 3,958.8 3.7% 4,101.2 3.3'/4 4,237,6 2.8% 4,366.4

34 TolalU.ee 4,193.7 4,281.0 3.0% 4,317.8 . 3.2% 4,624.6 3.3% 4,778.8 3.2% 4,930.2 2.8% 11,081,4

36 (Gap)/Avallabl• 0.0 o.o o.o o.o o.o o.o o.o o.o

Assumptions: 1. Property taxes are at the Charter Limit with a $692 credit. The Charter Limit Is assumed in FY16-20.

2. May 2010 fueVenergy tax revenue Increase is reduced by 27 percent in FY15-20.

3. Reserve contributions are at the policy level. 4. PAYGO, debt service, and current revenue reflect the Approved FY15-20 capital Improvements Program.

5. Retiree health Insurance Annual Required Contribution for pre-funding Is fully funded In FY15-20. The reduction In funding between FY14 and FY15 reflects savings achieved

through the planned Implementation of the Employer Group Waiver Program (EGWP) for all four operating agencies effective January 1, 2015.

6. Slate Ald, lndudlng MCPS and Montgomery College, Is not projected to Increase In FY16-20.

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Total llevenu .. Pn,pertyTax (!NI PDa) 1,!J38.9 1,535.7 2,3" 2.5" 1,574.8 2.:n. 1,616.8 2,91', 1,662.9 3,1" 1,715.2 3.4" 1,m.1 3.1" 1,828.0

2 Income TOIi 1,3-40.6 1,325.7 1.1" 2.2" 1,355.5 11.9" 1,516.5 5.3" 1,597.5 4.2" 1,665.'4 3.-'" 1,722.0 3,2" 1,776.4 3 T,....,.r/Recordalion Tax 160.7 J;JS.7 -5.2" 9.9" 152.4 9,5" 166.9 2-'" 170.9 ,U'J6 178.9 3.2" 11M.6 ,U" 192.9

' 1-, ... - 0.5 0.5 153.4" 153.'4" 1.3 49.4" 2.0 "3.6" 2.8 39.R ,.o 29.9" 5.2 o.°" u 5 OtherT- 277.7 277.0 l.°" 1.2" 280.4 1.3" 28'.0 1.8" 288.9 1.6" 293.4 1.5" 297.8 1.1" 301.1 6 Other....,nuu 955.8 955.B -1.4" -1.4" 942.B 0.3" 9'5.9 0.4% 949.3 0.4% 952.9 0.4% 956.8 0.4" 960.9 7 Totala-..,u• 4,27U 4,na.5 D-"' '·"' 4,307.3 !U'Mo 4,532.0 3.1'M, 4,672.4 2.9% 4,809.1 Z.7% 4,939.1 2.11% 5,064.3 a 9 Not Tranlfers In 43.3 ---~.:, 21.5% ·21.5% 34.0 U'K 34.6 2.0% 311.3 2.ffi 36.1 2.3% 37.0 2.4% 37.9

10 Total a-n- and,,._,.. A-llalile 4,317.6 4,276.8 0.S'M, 1.5% 4,341.3 5.2% 4,566.7 :a.n~ 4,707.7 :Z.ffi 4,114S.9 Z.ffi 4,976.0 2.5% S,102.2 11 12 Non-Opanrtlng lwdaet UN el -11•• 13 Deb!Servlc9 3.U.1 3-oM.1 7.3" 7.3" 369.4 5.7" 390.'4 1.4% 395.8 3,9" 411.3 3.6" 426,2 D,11!1, "26.2 1-4 PAYGO 30.0 30.0 8.3'6 8.3% 32.5 o.a" 32.7 1.5% 33.2 O.O!lt 33.2 0.0% 33.2 0.0" 33.2 15 CIP Cunwnt iw-,.,.. 49.4 49.4 49.3% 49.3" 73.7 -6.9" 68.6 5.1% 72.1 8.3% 78.0 -0.1" 78.0 0.11!1, 78,0 16 Change In Monlgon,9,y Coll-1'uto1VN -7.6 •7.6 100.0% 100,0'K o.o n/a 0.0 n/o D.O n/o o.o n/o 0.0 n/o 0.0 17 Chana• In MNC'l'C Raoervu -4.6 ""-6 102.4% 102.4% 0.1 0.4% 0.1 9.0!lt 0.1 13-'" 0.1 9.8% 0.2 -2.6" 0,1 18 Chango In MCI's - -38.2 -38.2 100.°" 100.0!I, 0.0 n/D 0.0 n/a 0.0 n/o o.o n/o 0.0 n/o 0.0 19 Cha,ige In MCG Spadol Fvnd Reio.- 1.6 1.6 -100.7" ·100.7" 0.0 249.8" o.o 178.6% 0.0 -41,0!I, 0.0 -4.2" o.o -8.6" o.o 20 Contribution to GenOfOI fund u...i-;gnai.d Reoorwaa -92.2 -1"7.8 157.6" 135.9'16 53.1 ·92.9" 3.8 178.6" 10.5 -,11.0'K 6.2 -4.2% 5.9 -8-6% 5.4 21 ContrilMlon to Ew,renw Slablllllll!lon t- 22.6 2U ..0.3" 0.6'11, 22.6 5.5" 23.8 2.9% 24.5 2,8" 25.2 -29.2" 17.8 -56.9% 7.7 22 llllllroo Health lnau- Pre-Funding 127.8 127.8 -3.5" -3.!l'II, 123.4 .0.4" 122.9 0.0% 123.0 -4.3" 117.6 ""·'" 112.5 0.11!1, 112.5 23 Set Hide far oth•r u- (tupplomontal oppn,pnalion,j 0.1 15.1 15900.°" 32.2% 20.0 0.0% 20.0 0.0% 20.0 0.09' 20.0 0.0% 20.0 0.0% 20.0 2"

T-Ottlw_af __ --1 an.a 60.491. 77.191. 694.7 ...... ,., 662.4 2,5% 679,2 1-9" 691.8 0.1% 693 •• ., .. ,., ff3.1

25 labl• lo Allocate IO ......... (fatal 3,884.51 ,......,1 I -6.l'M, -6.l'K, :a,646.•I 7.1% :a,904,31 :a.2% 4,028.51 3.1% 4,154.21 3,191, 4,212.21 3..2% 4,419.0

........... +-Tnmsten-T-1 OthwU..) 26 G ... .,u...;, 27 28 29 Montaomo,y County Public Schoolo IMCl'SI 2,13B.1 2,138.1 •0.2% ~o Monlll""*!' Collogo (Mq 2U.5 244.5 -2.5" 31 MNCPPC (w/o Debi S.,,,lco,) 111.9 111.9 -15.2" 32 MCG 1 390.0 1 90.0 ·15,2'6

33 .. .,u- 3 .. 94. 3,814.5 •t.1% 7.1'1, 3.904.3 3.2% 4,028.5 3.1% 4,1114.2 :a.1% 4,282.2 3.291, 4,419.0

34 ,_,u... 4,317.6 4,276.8 0.5% 1.t'llo 4,341.3 11.2% 4,1166.7 3.l'K, 4,707.7 2.9% 4,845.9 2.7'1!, 4,976.0 2.5'1!, 5,102.2

35 (Gap)/A,,..llalol• 0.0 o.o o.o o.o o.o 0.0 O.D o.o

A»sumptlons: 3 '8'3 7 .c:i

1 . Property taxes ONI at the Charter Limit with o $692 cred~. Other talCDS ore at current rates. - 31'.P!..\<, -~ 2. Res•rve contributiont ore al the policy I..., and consistent with legal requirements.

I 'i I . f \, ss --4-l,i<H'- J '""' e.. 3. PAYGO, dobt 1ervice, and ctll'TWII ,.....,,ue ""1~ the Appl'O't9d FYl 5-20 Capital Improvements Program. -4. Rstiree health insurance Annual Required Contribution for pre-funding is fully funded. 5. Stole Aid, induding MCPS and Mon1gomery College, Is not projected to increase In FYl 6-21. 6. Projected FYl 6 allocations for MCPS and MonlgomMy College assume County funding at maintenance of effort. The allocations do not include potentlal increaae1 lo State Aid or other p01sible agancy reaouN:411, such as use of additional fund balance. Additional State Aid ar uoe of fund balance would inc:noase the rate of growth l'or MCl'S and Montgomery Collage.

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App. Est %Chg. App. l %Chg. Projected l 'll, Chg. Projected l '!It Chg. Projected l 'll, Chg. Projected T % Chg. Projected FY15 FY15 FY15-16 FY16 FY16-17 FY17 FY17-18 FY18 FY16-19 FY19 FY19-ZO FY20 FY20-21 FY21

5-22-14 N1PfApp 5-21-15 Total Revenues

Property Tu 1,538.9 1,534.6 2.6"' 1,582.6 2.6% 1,624.2 2.8% 1,870.2 3.0% 1,720.1 3.3% 1,777.2 3.0% 1,831.0 2 Income Tu 1,340.6 1,333.1 6.9% 1,433.4 2.5% 1,469.7 8.1% 1,556.7 7.0% 1,867.8 3.9% 1,732.6 3.8% 1,794.1 3 Transfer/Recordatlon Tax 160.7 141.6 -4.3% 153.8 14.2% 175.8 6.1% 186.4 8.4% 198.3 3.2% 204.8 4.9'll, 214.8 4 Other Taxes 277.7 275.8 0.9% 280.3 12% 283.7 1.3% 287.3 1.0% 290.3 0.9% 293.0 12% 296.5 5 Olher Revenues 958.3 971.4 3.5% 990.1 --0.6% 984.1 0.6% 989.2 0.8% 994.8 0.6'll, 1,000.9 0.7% 1,008.3 6 Total Rev.nu•• 4,274.3 4,2ff.4 3.1% 4,440.3 2.2% 4,537.4 3.4% 4,891.$ 3.8% 4,871.1 2.1% 11,008.3 2.7% 11,144.5 7 8 Net Tranm111 In (Outl 43.3 44.3 -42.6% 24.9 -13.9% 21.4 2.3% 21.9 2.5% 22.& 2.8% 23.1 3.1% 23.8

9 Total Revenuea and Trenafers Avallable 4,317.1 4,300.7 3.4% 4,416.2 2.1% 4,6111.1 3.4% 4,713.8 3.8% 4,893.6 2.1% 5,031.4 2.7% 5,188.3 10 11 Non-Ope111tlng Budgel UH of RevenuM 12 Debi Senrice 34-4.1 339.0 2.9% 354.0 12.6% 399.4 2.8% 409.7 4.0% 426.0 4.0% 443.2 3.6% 469.3 13 PAYGO 30.0 30.0 13.5% 34.0 0.0% 34.0 0.0% 34.0 0.0% 34.0 0.0'M, 34.0 0.0% 34.0 14 CIP Current Revenue 49.4 54.9 18.6"' 57.7 21.2% 89.9 2.0% 71.3 11.2% 79.3 -1.5% 78.1 0.0% 78.1 15 Change In MontQomery Collage Reserves -7.8 -2.8 8.2% -7.1 100.0% 0.0 n/a 0.0 n/a 0.0 n/a 0.0 n/a 0.0 16 Change In MNCPPC Reaerves -4.6 -6.0 33.0% -3.1 102.9% 0.1 36.6% 0.1 8.3% 0.1 14.7% 0.2 -4.0% 0.1 17 Change In MCPS R.-ves -38.2 -8.2 13.1% -33.2 100.0% 0.0 n/a 0.0 n/a 0.0 n/a 0.0 n/a 0.0 18 Change In MCG Spacial FWICI Reserves 1.6 -3.8 -579.0% -7.5 102.5% 0.2 -82.3% 0.0 43.1% 0.0 16.9% 0.1 -27.7"/o 0.0 19 Conll1butlon lo General Fund Undeslgnaled Re1e1Ve1 -92.2 -131.9 76.1% -22.0 223.6% 27.2 -82.3% 4.8 43.1% 6.9 16.9% 8.1 -27.7% 5.6 20 Contrtbullon to Revenue Slabill:i:atlon Reserves 22.8 22.7 8.9% 24.2 4.7% 25.3 5.3% 26.7 5.6% 28.2 -47.3% 14.9 -39.2% 9.0 21 Retiree Health Insurance Pre-Funding 127.8 127.8 -15.2% 108.5 1.3% 109.9 -2.9% 106.7 -3.8% 102.7 -3.1"/o 99.5 -3.2% 96.3 22 Sat Aaicle for olher utea (supplemental appropriallOnsJ 0.1 0.0 1500.0% 2.0 900.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0

23 Total Other Uan of Rnourcn 433.1 424.7 17.2% 507.6 36.2% 888.0 -1.9% 873.3 3.8% 897.3 0.1% 898.0 0.7% 702.T

24 Available to Allocate to Agencin (Total Revenun+Net 3,114.5 3,878.0 1.11% 3,957.1 l-2.1%) 3,172.1

Transfers-total Other UaH) 4.3% 4,040.6 3.9% 4,196.4 3.3% 4,333.5 3.0% 4,465.6

25 26 Agency Un• 27 2B Montgomery CounlY Public Schools (MCPS) 2,138.1 2,108.1 1.8% 211 Montgomery College (MC) 244.5 236.3 3.1% 30. MNCPPC (wlo Debi Service) 111.9 111.9 3.2% 31 MCG 1390.0 1,421.7 1.7%

~~ ~n:l -

32 Agencyu- 3,814.5 3,171.0 1.r..4 4.3% 4,040.5 3.9% 4,191.4 3.3% 4,333.5 3.0'4 4,465.8

33 Total U•• 4,317.1 4,300.7 3.4% 2.1',4 4,551.1 3.4% 4,713.8 U% 4,893.8 2.8% 5,031.4 2.7% 5,161.3

34 (Gap)/Avallable _o.o 0.0 0.0 0.0 0.0 0.0 o.o 0.0

Assumptions; 1. Property taxes are at the Charter Limit with a $692 credit. The Charter Limit is assumed in FY17-21.

2. May 2010 fuelfenergy tax revenue is reduded by 27 percent in FY15-21. 3. Total reserves are projected to be 10 percent by FY20 consistent with the County's adopted fiscal policy. 4. PAY GO, debt service, and current revenue reflect the Amended FY15-20 Capital Improvements Program. 5. State Aid, including MCPS and Montgomery College, is not projected to increase in FY17-21.

3/t57.'3 - 3 <P4 &,_"

,..._~ -+"' """' f> '(O ~ e.(..+~ '"' D 4 ,e.,.,,...\o e.. r

) -310.7 t..c,..,I ,O\.J'-, I ~ .... w_

@) a~ \2-0,0 "-"(t1'(. -tW " ~ '" J~

J\A.r-L

Est. %Chg. %Chg. Projected 1 % Chg. Projected l % Chg. Projected l % Chg. Projected ·1 % Chg. Projected I %Chg. Projected FY16 FY16-17 FY16-17 FY17 FY17-18 FY18 FY18-19 FY19 FY19-20 FY20 FY20-2 l FY21 FY21-22 FY22

5-21-15 12-8-15 App/Proj Est/Proj 12-8-15 Total Revenues

Property Tax 1,582.6 1,578.3 1.2% 1.4% 1,600.8 2.3% 1,638.0 2.5% 1,679.1 3.1% 1,731.2 3.1% 1,784.4 3.3% 1,843.4 2 JncomeTax 1,433.4 1,382.6 -2.3% 1.3% 1,400.8 6.7% 1,494.4 7.9% 1,612.8 4.8% 1,689.9 4.8% 1,771.6 4.9% 1,857.5 3 Transfer/Recordation Tax 153.8 174.7 13.2% -0.4% 174.1 3.2% 179.7 4.5% 187.8 3.8% 194.9 7.7% 209.9 6.8% 224.2 4 Other Taxes 280.3 278.0 -0.1% 0.7% 280.1 1.1% 283.3 1.0% 286.0 1.1% 289.1 1.1% 292.4 1.2% 295.8 5 Other Revenues 990.1 989.7 -0.7% -0.6% 983.7 0.5% 988.4 0.5% 993.7 0.6% 999.5 0.7% 1,006.1 0.4% 1,010.6 6 Total Revenues 4,440.3 4,403.2 0.0% 0.8% 4,439.4 3.3% 4,583.9 3.8% 4,759.4 3.1% 4,904.6 3.3% 5,064.4 3.3% 5,231.5 7 8 Net Transfers In (Out) 24.9 25.0 -13.9% -14.2% 21.4 2.0% 21.8 2.3% 22.3 2.6% 22.9 2.6% 23.5 2.6% 24.2

9 Total Revenues and Transfers Available 4,465.2 4,428.2 -0.1% 0.7% 4,460.9 3.2% 4,605.7 3.8% 4,781.7 3.1% 4,927.6 3.3% 5,088.0 3.3% 5,255.7 10 11 Non-Operating Budget Use of Revenues 12 Debt Service 354.0 354.0 12.8% 12.8% 399.4 2.6% 409.7 4.0% 426.0 4.0% 443.2 3.6% 459.3 0.0% 459.3 13 PAYGO 34.0 34.0 0.0% 0.0% 34.0 0.0% 34.0 0.0% 34.0 0.0% 34.0 0.0% 34.0 0.0% 34.0 14 CIP Current Revenue 57.7 31.6 21.2% 120.8% 69.9 2.0% 71.3 11.2% 79.3 -1.5% 78.1 0.0% 78.1 0.0% 78.1 15 Change in Montgomery College Reserves -7.1 -4.6 64.9% 45.8% - .. -·2.5 100.0% 0.0 n/a 0.0 n/a 0.0 n/a 0.0 n/a 0.0 16 Change in MNCPPC Reserves -3.1 -1.5 51.0% 2.1% -1.5 106.6% 0.1 10.6% 0.1 26.5% 0.1 3.2% 0.1 9.3% 0.2 17 Change in MCPS Reserves -33.2 -23.2 69.8% 56.8% -10.0 100.0% 0.0 n/a 0.0 n/a 0.0 n/a 0.0 n/a 0.0 18 Change in MCG Special Fund Reserves -7.5 -7.5 102.3% 102.3% 0.2 -92.5% 0.0 240.2% 0.0 22.6% 0.1 -21.2% 0.0 11.0% 0.0 19 Contribution to Gener-al Fund Undesignafed Reserves -22.0 -34.0 269.8% 210.0% 37.4 -94.9% 1.9 240.2% 6.5 22.6% 8.0 -21.2% 6.3 11.0% 7.0 20 Contribution to Revenue Stabilization Reserves 24.2 24.0 2.7% 3.5% 24.8 5.2% 26.1 5.7% 27.6 -59.2% 11.3 -10.4% 10.l 0.5% 10.l 21 Retiree Heolth.lnsurance Pre-Funding 108.5 108.5 1.3% 1.3% 109.9 -2.9% 106.7 -3.8% 102.7 -3.1% 99.5 -3.2% 96.3 0.0% 96.3 22 Set Aside for other uses (supplemental appropriations) 2.0 17.0 900.0% 17.6% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 0.0% 20.0 23 Total Other Uses of Resources 507.5 498.3 34.3% 36.8% 681.6 -1.7% 669.8 4.0% 696.3 -0.3% 694.3 1.4% 704.2 0.1% 705.0

24 Available to Allocate to Agendes (Total 3,957.8 3,929.9 -4.5% -3.8% 3,779.3 4.1% 3,935.9 3.8% 4,085.4 3.6% 4,233.3 3.6% 4,383.7 3.8% 4,550.6

Revenues+Net Transfers-Total Other Uses) 25 26 Agency Uses 27 28 Montgomery County Public Schools (MCPS) 2,176.5 2,166.5 0.0% 0.5% 2,176.9 29 Montgomery College (MC) 252.2 249.7 -1.2% -0.2% 249.2 30 MNCPPC (w/o Debt Service) 115.6 114.l -11.5% -10.3% 31 MCG 1,413.4 1,399.6 -11.5% -10.6%

- -------·---- ---

32 Agency Uses 3,957.8 3,929.9 -4.5% -3.8% ~ 4.1% 3,935.9 3.8% 4,085.4 3.6% 4,233.3 3.6% 4,383.7 3.8% 4,550.6

33 Total·Uses 4,465.2 4,428.2 -0.1% 0.7% 4,460.9 \ 3.2% 4,605.7 3.8% 4,781.7 3.1% 4,927.6 3.3% 5,088.0 3.3% 5,255.7

34 (Gap)/Available 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Assumptions: '------1 3 eis7.'i5" 1. Properly taxes are at the Charter Limit with a $692 credit. Other taxes are at current rates. _3,,'7.3

f~}e(.,~ ·"' S.i ...L-2. Reserve contributions are at the policy level and consistent with legal requiremenls. ~ l.t'>" -1-\.-.,.-3. PAYGO, debt service, and current revenue reflect the Amended FY15-20 Capital lmprovemenls Program.

4. Retiree health insurance (OPEB) is fully funded. 5. State Aid, including MCPS and Montgomery College, is not projected to increase in FYl 7-22. 6. Projected FYl 7 allocations for MCPS and Montgomery College assume County funding at maintenance of effort. The allocations do not include potential increases to State Aid or other possible agency resources, such

as use of additional fund balance. Additional State Aid or use of fund balance would increase the rate of growth for MCPS and Montgomery College.

7. Estimated FYl 6 expenditures reflect the FYl 6 Approved Savings Plan.

®

1 2 3 4 5 8 7 8

g

10 11 12 13 14 15 16 17 18 19

20

21 22 23 24 25 26 27

28

28

30

@)

County Council Approved FY17-22 Public Services Program

Tax Supported Fiscal Plan Summary

IAiiP-7 Lfl.!.LJ

I %Chg. App. 'lf, Chg. Projecled I FY17-18 FY1-LJ

~ Chg. Projected J

FY16-17 FY17 --- -- IFY1S.20 ~

Total R•venuae Property Tax 1,582.8 1,580.8 9.9% 1,738.7 2.3'11, 1,779.2 3.0'IL 1,833.3 3.2% 1,892.5 Income Tax 1,433.4 1,438.1 3.8% 1,"87.6 8.4% 1,582.2 3.2% 1,833.3 3.4% 1,688.4 TranafertRecordaUon Tax 153.8 174.7 7.8% 185.8 2.3% 169.6 4.5'11, 177.3 3.9'11, 184.1 Other Taxes 280.3 276.2 -0.7'1!, 278:3 1.4% 282.3 1.3% 285,8 1.1% 289.0 Other Revanuae 990.1 985.9 3.8% 1,027.7 -0.9% 1,018.3 0.2% 1,020.2 0.2% 1,022.5 TOIIII RevanuH 4,440.3 4,465.1 11.8% 4,698.1 2.8°A 4.831.6 2,4% 4,948.8 2,&•A 6,071,1

Net Transfers In fOull 24.9 24.9 -43.7'A 14.0 2.3% 14,3 U% 14.7 2,7% 16.1 Total Revenues and Tranefera Avallallle 4,455.2 4,480.5 S.5% · 4,712.1 2.1% 4,146.0 2.4% 4,984.6 2.1°A 5,091,7

Non-<>peraUng Budget UH or RevenuH Debt service 354.0 348.9 9.7% 388.2 3.6% 402.0 4.3% 419.5 4.1% 438.5 PAYGO 34.0 34.0 0.0% 34.0 O.O'IL 34,0 0.0% 34.0 0,0% 34.0 CIP Cumtnt Revenue 57.7 81.9 -20.6% 45.8 78.5% 80.8 2.1% 82.5 -11.1% 75,0 Change In Olher Reser,es -50.8 -16.8 -4.9'11, -53,3 101.7'11, 0.9 -73.9% 0.2 10.6% 0.3 Canlribullofl to General Fund Undellignated Re1&rves -22.0 -37.2 173.4% 18.2 92.7'11, 31.2 -85.8% 4.5 14.0% 5.1 Canlrlrution to Revenue Steblllzatlon Reservea 24.2 24.1 5.7% 25.6 5.9'11, 27.1 6.7% 28.9 -36.6% 18.4 Set Alkle for other uses (aupplemen_~I approprlaUons) 2.0 -0.4 -93.8% 0.1 16113.1% 20.0 0.0% 20.0 0.0% 20,0 Total Other UH& of Raaoun:H 398.0 412.5 14.4% 456.5 30.5% 598.0 •1.1% 588,7 -0.1% 589.2

Avallabl• to Allocate to AgenclH (Total RevenuN+Net 4,068.2 4,068.0 4.7% 4,251.6 -0.1% 4,250.0 2.8% 4,374.9 2.8% "4,602.5 Tranafera-Totel Other UHa)

AgencyUHa

Monf9olnerY County PubUc Schools (MCPS) 2,178.5 2.145.6 8.2% 2,311.6 ManlgomtKy College (MC) 252.2 247.8 3.7% 281.8 MNCPPC (w/o.Debl Servtce) 117.4 117.1 2.7% 120.6 MCG 1520.1 1,557.2 2.7% 11\tliA

4.7% ~ J -0.1% '""! -

AgencyUaH 4,086.2 4,066.0 4,260.0 2.9V, 2.9% 4,502.5

TotalUaH 4,4H.2 4,480.li 5,1% 4,712.1 ~ "4,846.0 2,-4% 4,964.5 2.6% 5,091.7

(Gap),IAvallable 0.0 0.0 0.0 .!.!? 0.0 .Q,O

Assumptions: 1. FY17 average weighted property tax rate ls 3.94 cents higher than FY16. FY18-22 property taxes are at the Charter Limit with a $692 2. Reserve contributions are consistent with legal requirements and the minimum policy target. 3. PAYGO, debt service, and current revenue reflect the Approved FY17-22 Capital Improvements Program. 4. State Aid, including MCPS and Montgomery College, is not projected to increase from FY17-22.

Y, 291.b - 3/ 711_.3

% Chg. Projected % Chg. Projected FY20-21 FY21 FY21-22 FY22

3.1% 1,951.7 3.3'11, 2,016.5 4.8% 1,768.3 4.3% 1,841.8 7.8% 198,5 8.8% 212.0 1.1% 292.3 1.2% 295.9 0.8% 1,028.3 0.8% 1,034.1 3.2% 6,237,1 :J.1% 6,400.2

2.7% 16.S 2.7% 16.11

3.2% 6,252.6 3.1% 6,416,1

3.9% 453.5 2.8% 468.1 0.0% 34.0 0.0% 34.0 3.7% 77.8 -7.8% 71.11 2.7% 0.3 14.0% 0.3 6.5% 5.4 28.2% 7.0

-49.7'11, 9.2 5.4% 9.7 0.0% 20.0 0.0% 20.0 1.9% 800.3 1.5% 809.0

3.3% 4,862.3 3.3% 4,807.1

- -

3.3% 4,652.3 3.3% 4,807.1

3.2% 1,262.8 3.1% 5,416.1

0.0 0.0

5 ~7~. 3 rn~ t\-\c.,, fro)e.'-Tu~ •'" \)Lc.e.-w-\,~

Update MEMORANDUM TO: SUBJECT: SUMMARY

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Transcript of Update MEMORANDUM TO: SUBJECT: SUMMARY