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Home My WebLink About5I - 3rd Quarter Financial Report MEETING DATE: AGENDA #: PREPARED BY: PRESENTER: AGENDA ITEM: DISCUSSION: 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT OCTOBER 18, 2010 51 JERIL YN ERICKSON, FINANCE DIRECTOR JERIL YN ERICKSON CONSIDER APPROVAL OF THE 2010 3RD QUARTER FINANCIAL REPORT FOR THE GENERAL FUND AND ENTERPRISE FUNDS Introduction Staff has prepared summary financial reports as of September 30, 2010 for the General Fund, Water and Sewer Fund, Water Quality Fund, and Transit Fund. The reports reflect revenue and expenditure activity for the first nine months of 2010. The reports are preliminary, unaudited and may change. The attached memorandum provides a summary of the significant issues. If council members have questions please feel free to contact me at 952- 447-9841 for more information. ALTERNATIVES: 1. A motion to accept the September 30, 2010 Financial Report as submitted. 2. Take no action and provide the staff with specific direction. RECOMMENDED Alternative 1. A motion as part of the consent agenda to accept the MOTION: September 30, 2010 Financial Report as submitted. - MEMORANDUM TO: FROM: RE: Prior Lake City Council Jerilyn Erickson, Finance Director Financial Report dated 09/30/2010 The financial reports presented as part of this agenda item reflect activity for the first nine months of 2010. The significant issues identified at this time are summarized below. General Fund Revenues Property taxes are received in June and December. Revenues from taxes are recognized on a cash basis and not an accrual basis for the General Fund. The collection rate of current taxes (47%) is comparable to 2009. Delinquent collections are slightly higher than 2009. The Fiscal Disparities revenue includes $57k that was disbursed by the County as a correction for 2009. The City budgeted an anticipated $227,000 cut in the Market Value Homestead Credit Aid for 2010. The actual amount of MVHC Aid to be cut will be $258,000, a shortfall of $31k. Single family building permits are budgeted at 50 for 2010. Eighty-one (81) permits were issued through September 30 compared to forty-one (41) during the first nine months of 2009. The average value associated with these permits is slightly lower compared to those issued in 2009. This higher level of permits is reflected in building permit revenues as well as plan check revenues. As of October 13, no additional single family building permits have been. Police and Fire state aid were received in October; therefore, they are not reflected on this report. Police aid was $4,500 less than budgeted. Fire aid was $3,500 more than budgeted. Fire state aid is passed through to the Fire Relief Association. Approximately 90% of the Municipal State Aid for road maintenance has been received. The final 1 0% is expected in January 2011. Franchise and PEG Access Fees are typically received during the month following quarter end. Recreation program fees are lower than anticipated. Facility rental revenues are primarily down due to Maui Wowi not paying their rental fees since March, 2010. Staff is currently discussing the situation with the owner of Maui Wowi. City Contract Services reflect revenues received from the Prior Lake Soccer Association and Rotary for additional services provided by City Staff such as field striping and setup and security for the Jazz Festival. Tower lease revenues reflect payment from all of the agreements in place. Tower leases were executed with Clear Wireless in May and August 2010 which generated additional tower lease revenues of $45k. A communication site lease was executed with TTM in August which generated additional revenue of $7,500. Court fines and prosecution restitution revenues are coming in lower than previous years. A shortfall of $50-60k is anticipated. The associated prosecution costs are also lower. Perhaps much of the reason for the reduced revenues is that we have operated with one less officer than budgeted this year. Total interest earnings are lower than previous years due to declining interest rates. Interest revenue is at 141 percent of the budget. This is due primarily to receipt of interest earnings Page 2 from bonds being called early. Keep in mind that, just as in years past, interest earnings are adjusted at year end to reflect the fair value of the securities. General Fund EXDenditures General Fund expenditures for 2010 represent 61 percent of the $12,120,546 budget. The level of expenditures is about $300k less than the same period in 2009. The Legal department reflects expenses through July for general legal. In addition, prosecution legal costs are approximately $45k less for the nine months as compared to 2009. As previously mentioned, the revenues that correspond with the prosecution costs are significantly down, as well. Software and hardware upgrades budgeted in the Technology department will take place during 4th quarter and reflected on future financial reports. The regular pension contribution ($125k) to the Fire Relief Association will be made in October in conjunction with the receipt of State Fire Aid. In addition, the second half of the deficit contribution ($41 k) will be made in December after the second half tax settlement is received. Partial costs associated with street and park maintenance are reflected on this report. Final payments will take place later this Fall. HVAC repairs at the library have been limited this year, thus resulting in lower expenditures for this department. Significant savings are expected in the areas of fuel, electrical and gas across all departments. In addition, savings should be realized for general liability and property insurance premiums due to experience ratings. The 2010 budget includes a $69k contingency reserve account. The City Council has authorized the use of $11 k from the contingency reserve account to fund a portion of the Maxfield study. Staff will be recommending that the costs associated with the abatement of Oak Wilt be funded by the contingency reserve account, as well. The initial cost is $9,150 plus an estimate of $20,000 for 14 additional properties that have been identified to contain diseased trees. If the disease has spread further, additional funding will be needed. If the above mentioned costs are approved by Council, the contingency reserve account will have a balance of approximately $29k. Budgeted transfers include $1,680,600 associated with debt payments for bonds issued in conjunction with project referendums and City Hall/Police Station construction. It also includes a $100,000 transfer to the Park Equipment Revolving Fund as part of the long-term Park Equipment Replacement Plan. Actual debt transfers are made to coincide with the timing of debt payments of which larger payments are scheduled in December. EnterDrise Funds The financial reports for the Water and Sewer Fund and the Water Quality Fund reflect four billing cycles. Water consumption and revenues are down about 11 % compared to 2009. Sewer revenues are down about 4% and Water Quality revenues are tracking very closely to 2009. As with the General Fund, total interest earnings are lower than previous years. Interest revenue is currently at 149% of budget for the Water & Sewer Fund but will be adjusted at year end to reflect the fair value of the securities. Page 3 Costs associated with capital improvements are typically incurred during the summer and fall. The Water Quality Fund reflects a $50k transfer to the Construction Fund for the County Road 21 extension project which was approved by the Council. Water and sewer operational activities will continue to be reported as one fund throughout 2010. Per council direction, staff will segregate the Water and Sewer Fund into two funds at the end of 2010. Transit revenues and expenses are reflected on a cash basis. The September 30 report reflects revenue activity for bus fares through July and State Transit Aid through August. As was anticipated, State Transit Aid is significantly lower than previous years. Contract bus service is reflected through July. The Transit budget included two capital improvements/acquisitions: Eagle Creek Transit Station ($219k) and JARC Grant Bus Purchase ($62k). Scott County was able to cover the local contributions (i.e. City of Prior Lake and City of Shakopee) through federal funding for the Eagle Creek Transit Station so Prior Lake will not incur the $219k expense. The JARC Grant bus has been delivered and is expected to be placed in service by December. The City has not been billed for its share by the Met Council. If you have any questions regarding these financial reports, please contact me at 952.447.9841. Page 4 City of Prior Lake General Fund Summary As of 9/30/2010 (Unaudited) Variance with Actual 2010 2010 Budget - Percent of Budget Actual Positive (Negative) Budget Revenues Taxes 8,482,856 4,351,118 (4,131,738) 51% Licenses and permits 269,975 351,568 81,593 130% Intergovernmental 1,327,667 941,749 (385,918) 71% Charges for services 1,382,131 1 , 177 , 156 (204,975) 85% Fines and forfeitures 182,000 83,842 (98,158) 46% Interest on investments 90,000 127,222 37,222 141% Other 60,917 36,098 (24,819) 59% Transfers from other funds 325,000 243,750 (81,250) 75% Total revenues 12,120,546 7,312,503 (4,808,043) 60% Expenditures General government 2,342,605 1,489,657 852,948 64% Public safety 4,341,614 2,882,487 1,459,127 66% Public works 1,737,675 1,156,774 580,901 67% Culture & recreation 1,804,653 1,292,421 512,232 72% Urban & economic development 44,401 20,507 23,894 46% Subtotal 10,270,948 6,841,846 3,429,102 67% Transfers to other funds 1,780,600 513,249 1,267,351 29% Contingency reserve 69,000 7,225 61,775 10% Total expenditures 12,120,546 7,362,320 4,758,226 61% Net change (49,817) Page 1 of 7 City of Prior Lake General Fund Revenues As of 9/30/2010 (Unaudited) Variance with 2010 2010 Amended Budget - Actual Budget Actual Positive (Negative) Percent Property taxes 31010 Current taxes 7,952,993 3,777,449 (4,175,544) 47% 31012 Market value credit aid (227,546) 227,546 0% 31020 Delinquent taxes 116,663 116,663 0% 31040 Fiscal disparities 757,409 457,006 (300,403) 60% 8,482,856 4,351,118 (4,131,738) 51% Licenses & permits 32100 Business licenses 1,300 1,500 200 115% 32110 Liquor licenses 57,000 56,742 (258) 100% 32160 Refuse haulers 3,875 3,175 (700) 82% 32161 Plumbing registrations 875 1 ,425 550 163% 32170 Outdoor concert permits 1,100 2,550 1 ,450 232% 32180 Cigarette licenses 3,250 3,250 100% 32210 Building permits 166,750 223,579 56,829 134% 32211 Retainage forfeiture 1,500 1,500 0% 32215 Mechanical permits 14,900 24,761 9,861 166% 32230 Plumbing permits 12,425 23,691 11,266 191% 32231 Sewer/water inspection 2,500 4,575 2,075 183% 32240 Animal licenses 3,750 3,545 (205) 95% 32260 Burning permits 2,250 1,275 (975) 57% 269,975 351,568 81,593 130% Intergovernmental revenue 33401 Local government aid 11,905 5,953 (5,952) 50% 33416 State aid - police training 8,855 7,887 (968) 89% 33417 State aid - fire training 2,683 2,683 0% 33418 State road & bridge aid 230,000 214,979 (15,021) 93% 33420 State fire aid - ins premium 123,000 2,000 (121,000) 2% 33421 State police aid - ins premium 155,000 (155,000) 0% 33422 State aids & grants 3,593 3,593 0% 33610 County/city aids & grants 13,800 21,534 7,734 156% 33620 Township fire & rescue aid 348,065 348,331 266 100% 33621 Liaison aid 54,042 47,289 (6,753) 88% 33631 Payment in lieu of taxes 380,000 285,000 (95,000) 75% 33700 Miscellaneous grants 3,000 2,500 (500) 83% 1,327,667 941,749 (385,918) 71% Charges for services 34103 Zoning & subdivision fees 7,810 10,008 2,198 128% 34104 Plan check fees 83,250 136,416 53,166 164% 34105 Sale of maps/publications 2,500 1,726 (774) 69% 34107 Assessment searches 400 280 (120) 70% 34109 Project admin/eng fees 348,553 317,853 (30,700) 91% 34203 Accident/warrant reports 300 550 250 183% 34303 Franchise fees 537,000 272,004 (264,996) 51% 34304 PEG access fees 36,000 17,655 (18,345) 49% 34731 Softball fees 28,000 31,060 3,060 111% 34735 Recreation program fees 56,000 44,932 (11,068) 80% 34740 Beach concessions 13,000 10,845 (2,155) 83% 34760 Facility rental 68,166 48,475 (19,691 ) 71% Page 2 of 7 City of Prior Lake General Fund Revenues As of 9/30/2010 (Unaudited) Variance with 2010 2010 Amended Budget - Actual Budget Actual Positive (Negative) Percent 34761 Studio/pavilion rental 15,000 13,895 (1,105) 93% 34762 Park shelter rental 7,000 10,318 3,318 147% 34765 Tower leases 150,152 201,079 50,927 134% 34780 Park admission fees 29,000 35,754 6,754 123% 34783 City Contract Services 24,306 24,306 0% 1,382,131 1,177,156 (204,975) 85% Fines & forfeitures 35101 County court fines 115,000 52,244 (62,756) 45% 35104 Prosecution restitution 67,000 31,598 (35,402) 47% 182,000 83,842 (98,158) 46% Miscellaneous revenues 36210 Interest earnings 90,000 127,222 37,222 141% 36211 Developer agreements 0% 36212 Miscellaneous revenue 30,000 21,798 (8,202) 73% 36225 Unrealized inv. Gain(loss) 0% 36230 Contributions & donations 25,000 14,300 (10,700) 57% 145,000 163,320 18,320 113% Other financing sources 39102 Sale of property 5,917 (5,917) 0% 39203 Transfers from other funds 325,000 243,750 (81,250) 75% 330,917 243,750 (87,167) 74% Total revenues 12,120,546 7,312,503 (4,808,043) 60% Page 3 of 7 City of Prior Lake General Fund Expenditures As of 9/30/2010 (Unaudited) Variance with 2010 2010 Budget - Actual Budget Actual Positive (Negative) Percent General government 41110 Mayor & council 65,453 41,878 23,575 64% 41130 Ordinance 7,000 2,232 4,768 32% 41320 Administration 351,576 249,325 102,251 71% 41330 Boards & commissions 12,474 2,799 9,675 22% 41410 Elections 7,167 5,125 2,042 72% 41520 Finance 300,327 220,418 79,909 73% 41540 Internal auditing 28,200 25,190 3,010 89% 41550 Assessing 108,200 105,000 3,200 97% 41610 Legal 385,000 164,756 220,244 43% 41820 Personnel 131,540 86,307 45,233 66% 41830 Communications 107,382 74,357 33,025 69% 41910 Comm development/natural res 252,563 172,158 80,405 68% 41920 Technology 146,597 72,908 73,689 50% 41940 Buildings & plant 439,126 267,204 171,922 61% Total general government 2,342,605 1,489,657 852,948 64% Public safety 42100 Police 3,072,315 2,151,802 920,513 70% 42200 Fire 862,159 440,855 421,304 51% 42400 Building/transportation services 363,796 268,364 95,432 74% 42500 Emergency management 7,500 1,773 5,727 24% 42700 Animal control 35,844 19,693 16,151 55% Total public safety 4,341,614 2,882,487 1,459,127 66% Public works 43050 Engineering 375,022 262,091 112,931 70% 43100 Street 1,032,659 659,586 373,073 64% 43400 Central garage 329,994 235,097 94,897 71% Total public works 1,737,675 1,156,774 580,901 67% Culture/recreation 45100 Recreation 403,502 293,128 110,374 73% 45200 Parks 1,310,084 948,584 361,500 72% 45500 Libraries 91,067 50,709 40,358 56% Total culture/recreation 1,804,653 1,292,421 512,232 72% Urban & economic development 46500 Economic development 44,401 20,507 23,894 46% Total urban/economic dev 44,401 20,507 23,894 46% 49303 Transfers to other funds 1,780,600 513,249 1,267,351 29% 49999 Contingency reserve 69,000 7,225 61,775 10% Total expenditures 12,120,546 7,362,320 4,758,226 61% Page 4 of 7 City of Prior Lake Water & Sewer Fund As of 9/30/2010 (Unaudited) Variance with 2010 2010 Budget - Actual Budget Actual Positive (Negative) Percent Operating revenues Charges for services - water 37100 Water revenues 2,138,750 1,212,537 (926,213) 57% 37110 Capital facility revenue 450,000 308,350 (141,650) 69% 37140 Door hanger charges 14,650 14,650 0% 37150 Water reconnect charges 9,000 3,020 (5,980) 34% 37160 Penalties 70,963 42,237 (28,726) 60% 37170 Water meters 26,000 52,578 26,578 202% 37175 Pressure reducers 8,225 9,915 1,690 121% 37180 Frost plates 45 45 0% 37190 Mise revenue adjustments (5) (5) 0% 37750 Connection fee - water 0% Total water revenues 2,702,938 1,643,327 (1,059,651 ) 61% Charges for services - sewer 37102 Sewer revenues 1,916,250 689,326 (1,226,924) 36% 37104 MCES revenues 630,689 630,689 0% Total sewer revenues 1,916,250 1,320,015 (596,235) 69% Miscellaneous revenues 36210 Interest earnings 100,000 149,267 49,267 149% 36212 Miscellaneous 2,999 2,999 0% Total miscellaneous revenues 100,000 152,266 52,266 152% Total revenues 4,719,188 3,115,608 (1,603,620) 66% Operating expenses Personnel & current expenses 41520 Finance 123,870 82,826 (41,044) 67% 49400 Water 1,518,521 1,099,862 (418,659) 72% 49450 Sewer 2,090,547 1,424,347 (666,200) 68% Total operating expenses 3,732,938 2,607,035 (1,125,903) 70% Capital improvements 49400 Water improvements 495,000 147,545 (347,455) 30% 49450 Sewer improvements 144,000 (144,000) 0% 49005 CIPP pipe slip lining 150,000 (150,000) 0% Total capital improvements 789,000 147,545 (641,455) 19% 49303 Transfers to other funds 1,054,796 498,373 (556,423) 47% Total expenses 5,576,734 3,252,953 (2,323,781 ) 58% Net change (857,546) (137,345) Page 5 of 7 City of Prior Lake Water Quality Fund As of 9/30/2010 (Unaudited) Variance with 2010 2010 Budget - Actual Budget Actual Positive (Negative) Percent Operating revenues Charges for services - storm water 37120 Water quality revenue 425,000 292,755 (132,245) 69% Total water quality revenues 425,000 292,755 (132,245) 69% Miscellaneous revenues 36210 Interest earnings 15,270 15,270 0% Total miscellaneous revenues 15,270 15,270 0% Total revenues 425,000 308,025 (116,975) 72% Operating expenses Personnel & current expenses 49420 Water quality 218,367 148,996 69,371 68% Capital improvements 49420 Water quality 225,000 171,136 53,864 76% 49303 Transfers to other funds 50,000 (50,000) 0% Total expenses 443,367 370,132 73,235 83% Net change (18,367) (62,107) Page 6 of 7 City of Prior Lake Transit Fund As of 9/30/2010 (Unaudited) Variance with 2010 2010 Budget - Actual Budget Actual Positive (Negative) Percent Operating revenues Charges for services - transit revenue 38400 Bus fares 90,000 71,853 (18,147) 80% 38422 State transit aid 444,661 328,476 (116,185) 74% Miscellaneous revenues Total transit revenues 534,661 400,329 (134,332) 75% Total revenues 534,661 400,329 (134,332) 75% Operating expenses Personnel & current expenses 49804 Transit services 863,837 333,219 530,618 39% Capital improvements 49804 Capital improvements 280,636 5,389 275,247 2% Total expenses 1,144,473 338,608 805,865 30% Net change (609,812) 61,721 Page 7 of 7