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Home My WebLink About5F Preliminary 4th Quarter Financial Reportf PRIOR i~ U 4646 Dakota Street SE ` - ' Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: FEBRUARY 22, 2011 AGENDA #: 5 F PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR PRESENTER: JERILYN ERICKSON AGENDA ITEM: CONSIDER APPROVAL OF THE PRELIMINARY 2010 4TH QUARTER FINANCIAL REPORT FOR THE GENERAL FUND AND ENTERPRISE FUNDS DISCUSSION: Introduction Staff has prepared preliminary summary financial reports as of December 31, 2010 for the General Fund, Water and Sewer Fund, Water Quality Fund and Transit Fund. The reports reflect revenue and expenditure activity for 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 December 31, 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: December 31, 2010 Financial Report as submitted. RpvIewed�b Frank Boyles, City Manager J 04 FRIG MEMORANDUM u TO: Prior Lake City Council FROM: Jerilyn Erickson, Finance Director RE: Financial Report dated 12131/2010 The financial reports presented as part of this agenda item reflect activity for all of 2010. The significant issues identified at this time are summarized below. General Fund Revenues Preliminary yearend balances reflect actual revenues exceeding budgeted revenues by $455,000 or 4 %. Property taxes were received in June and December with a final settlement received in January, 2011. Revenues from taxes are recognized on a cash basis throughout the year and then on a modified accrual basis at yearend. In November, I had projected a conservative 93% collection rate of current taxes. This was based on significantly higher delinquent tax receivables as of 12/31/2009 and ongoing pessimism about the economy. The collection rate of current taxes in 2010 was higher than I expected and higher than 2009. The current tax collection rate was 95% versus 94% in 2009. In addition, delinquent collections were much higher resulting in $77k more in 2010 compared to 2009. As mentioned in previous financial reports, 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 cut was $258,000. Single family building permits were budgeted at 50 for 2010. Ninety -four (94) permits were issued in 2010 compared to sixty -two (62) during 2009. The average value associated with these permits ($267,000) is lower compared to those issued in 2009 ($283,000). This higher level of permits is reflected in building permit revenues (including mechanical and plumbing permits) as well as plan check revenues. Total revenue generated from building permits was $493,000 which is about $214,000 more than what was budgeted. Police and Fire state aids were received in October. 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. Municipal State Aid received for road maintenance was about $8,900 higher than anticipated. Project administration /engineering fee revenues reflect the internal costs associated with projects that were finalized in 2010. Franchise and PEG Access Fees were about $10,000 higher than budget. This included $5,000 in new franchise and PEG revenues from Integra. Recreation program fees were lower than anticipated. Facility rental revenues were primarily down due to Maui Wowi not paying their rental fees since March, 2010. Maui Wowi has vacated the Club Prior site. City Contract Services reflect $33,000 in 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. Page 2 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. Clear Wireless has terminated their agreement for the Crest Avenue tower, effective February 2011. The 2011 budget will not be impacted. Court fines and prosecution restitution revenues were $56,000 under budget as was anticipated. The associated prosecution costs are also lower. The police department was operating with one less officer than budgeted during 2010 year. Total interest earnings are lower than previous years due to declining interest rates. Historically, interest revenue has been budgeted conservatively. Currently, interest earnings are at 160% of the budget. December interest has not been posted yet. Keep in mind that, just as in years past, interest earnings are also adjusted at year end to reflect the fair value of the securities. General Fund Expenditures General Fund expenditures for 2010 represent 96 percent of the $12,120,546 budget. The 2010 level of expenditures, $11,600,000, is slightly higher than 2009. Approximately $463,000 or 88% of the preliminary savings is predominantly in six areas: Department Amount 2010 Comments 2011 Budget Legal $105,000 $70k savings in prosecution 2011 budget has been adjusted costs paid to SJPA; $35k less for reduced SJPA costs and litigation than budgeted. court fine/ prosecution revenues. Police $100,000 $93k budgeted for Ficken's 2011 budget has been adjusted position; offset by additional for reduced fuel, utility and gas $30k OT to cover position and costs. Ficken's position was maintain minimum staffing filled in January, 2011. requirements; $30k savings in fuel, utilities and gas. Buildings & $ 69,000 $13k savings in 2011 budget has been adjusted Plant property /liability insurance; for reduced fuel, utility and gas $46k savings in electric & gas; costs. $4k postage. Fire $ 65,000 $12k personnel costs; $35k 2011 budget has been adjusted savings in fuel, electric & gas; for reduced fuel, utility and gas $7k training; $9k maintenance; costs. $6k capital; some savings offset by higher fire relief association contributions (pass throu h and deficit). Contingency $ 63,000 Expenditure for Maxfield was The contingency was eliminated absorbed in Economic in the 2011 budget. Development budget. Recreation $ 36,000 $20k seasonal staff; $7k 2011 budget reflects a $10k senior and playground reduction in seasonal staff and a programs; $7k community $5k reduction in operational events. supplies for programs. Libraries $ 25,000 $15k maintenance wasn't 2011 budget has been adjusted completed; $10k savings in for reduced gas. electric & gas. Total $463,000 Page 3 Significant savings were expected in the areas of fuel, electrical and gas across all departments. The 2011 budget for these areas was reduced by about $68,000. Staff is considering options for amending the 2011 budget to reflect some additional areas in which savings have been realized in 2010 and could realistically carry over to 2011. These options will be presented to the Council at a later date. Water & Sewer Fund (combined in 2010) Preliminary yearend balances reflect actual total revenues exceeding budgeted revenues by $115,000 or 2% in the Water & Sewer Fund. Water consumption and revenues were down about 13% compared to 2009. Sales of water meters and pressure reducers were up as the number of building permits issued was at 94. Sewer revenues are about 2% less than 2009 revenues. As with the General Fund, total interest earnings are lower than previous years. Interest revenues are budgeted conservatively each year. Currently, interest revenue is at 175% of budget for the Water & Sewer Fund but will be adjusted at year end to reflect the fair value of the securities. December interest has not been posted yet. The water operation and the sewer operation both realized savings in fuel, electric and gas. This was due, in part, to lower water consumption which resulted in less pumping. To fully understand the impact of capital expenditures, you should look at both the Capital Improvements and the Transfers to Other Funds line items combined. Capital expenditures exceeded the budget due to the CR21 repairs authorized in 2009 and completed /paid for in 2010. This is common that project expenditures will be paid for in multiple years. Water and sewer operational activities have been 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. Water Quality Fund Preliminary yearend balances reflect actual total revenues exceeding budgeted revenues by $77,000 or 18 %. This includes $49,000 of grant revenues that weren't originally budgeted. The Water Quality Fund reflects $111,000 in transfers to the Construction Fund for the County Road 21 extension and CR12 projects which were approved by the Council. The capital expenditures reflect costs associated with projects authorized in 2009 and completed /paid for in 2010. Transit Fund Preliminary yearend balances reflect actual total revenues exceeding budgeted revenues by $77,000 or 14 %. As was anticipated, State Transit Aid is significantly lower than previous years (about $122,000 less than 2009). Bus fares are higher than anticipated but at lower levels than 2009. The budget reflected costs associated with operating the JARC Grant bus. The bus was not received until late 2010 and placed into service in January, 2011. Consequently, the expenses reflect a savings from this delay. 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 did not incur the $219k expense. If you have any questions regarding these financial reports, please contact me at 952.447.9841. Page 4 o T— City of Prio r Lake General Fund Summary As of 12/31 /2010 (Unaudited) Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Interest on investments Other Transfers from other funds Total revenues Expenditures General government Public safety Public works Culture & recreation Urban & economic development Subtotal Transfers to other funds Contingency reserve PRELIMINARY as of 0211612011 2010 Budget 2010 Actual Variance with Budget - Positive (Negative) Actual Percent of Budget 8,482,856 8,641,633 158,777 102% 269,975 410,307 140,332 152% 1,327,667 1,356,875 29,208 102% 1,382,131 1,531,701 149,570 111% 182,000 126,206 (55,794) 69% 90,000 144,120 54,120 160% 60,917 39,965 (20,952) 66% 325,000 325,000 - 100% 12,120,546 12,575,807 455,261 104% 2,342,605 2,125,064 217,541 91% 4,341,614 4,165,310 176,304 96% 1,737,675 1,730,598 7,077 100% 1,804,653 1,746,134 58,519 97% 44,401 41,150 3,251 93% 10,270,948 9,808,256 462,692 95% 1,780,600 1,781,843 (1,243) 100% 69,000 6,450 62,550 9% Total expenditures 12,120,546 11,596,549 523,997 96% Net change - 979,258 Page 1 of 7 04 FRIO City of Prior Lake PRELIMINARY as of 0211612011 U General Fund Revenues As of 12/31/2010 (Unaudited) Variance with 2010 2010 Amended Budget - Actual Budget Actual Positive (Negative) Percent Property taxes 31010 Current taxes 7,952,993 7,563,928 (389,065) 95.1% 31012 Market value credit aid (227,546) - 227,546 0% 31020 Delinquent taxes - 235,004 235,004 n/a 31040 Fiscal disparities 757,409 842,701 85,292 111% 8,482,856 8,641,633 158,777 102% Licenses & permits 32100 Business licenses 1,300 1,550 250 119% 32110 Liquor licenses 57,000 56,767 (233) 100% 32160 Refuse haulers 3,875 3,175 (700) 82% 32161 Plumbing registrations 875 1,500 625 171% 32170 Outdoor concert permits 1,100 2,550 1,450 232% 32180 Cigarette licenses 3,250 3,250 - 100% 32210 Building permits 166,750 267,678 100,928 161% 32211 Retainage forfeiture - 1,500 1,500 n/a 32215 Mechanical permits 14,900 31,170 16,270 209% 32230 Plumbing permits 12,425 30,126 17,701 242% 32231 Sewer /water inspection 2,500 5,321 2,821 213% 32240 Animal licenses 3,750 3,770 20 101% 32260 Burning permits 2,250 1,950 (300) 87% 88% 269,975 410,307 140,332 152% Intergovernmental revenue 33160 Federal Aids /grants 7,810 1,745 1,745 n/a 33401 Local government aid 11,905 11,905 - 100% 33416 State aid - police training 8,855 7,887 (968) 89% 33417 State aid - fire training - 2,683 2,683 n/a 33418 State road & bridge aid 230,000 238,866 8,866 104% 33420 State fire aid - ins premium 123,000 127,482 4,482 104% 33421 State police aid - ins premium 155,000 150,567 (4,433) 97% 33422 State aids & grants - 5,059 5,059 n/a 33610 County /city aids & grants 13,800 29,561 15,761 214% 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 380,000 380,000 - 100% 33700 Miscellaneous grants 3,000 5,500 2,500 183% 1,327,667 1 29,208 102% Charges for services 34103 Zoning & subdivision fees 7,810 12,152 4,342 156% 34104 Plan check fees 83,250 159,589 76,339 192% 34105 Sale of maps /publications 2,500 2,813 313 113% 34107 Assessment searches 400 400 - 100% 34109 Project admin/eng fees 348,553 318,353 (30,200) 91% 34203 Accident/warrant reports 300 713 413 238% 34303 Franchise fees 537,000 547,443 10,443 102% 34304 PEG access fees 36,000 35,516 (484) 99% Page 2 of 7 oy City of Prior Lake General Fund Reven ues As of 12/31 /2010 (Unaudited) 34731 Softball fees 34735 Recreation program fees 34740 Beach concessions 34760 Facility rental 34761 Studio /pavilion rental 34762 Park shelter rental 34765 Tower leases 34780 Park admission fees 34783 City Contract Services Fines & forfeitures 35101 County court fines 35104 Prosecution restitution Miscellaneous revenues 36210 Interest earnings 36212 Miscellaneous revenue 36230 Contributions & donations Other financing sources 39102 Sale of property 39203 Transfers from other funds Total revenues PRELIMINARY as of 0211612011 115,000 81,369 (33,631) 71% 67,000 44,837 (22,163) 67% 182.000 126.206 (55.794) 69% 90,000 144,120 54,120 160% 30,000 25,465 (4,535) 85% 25.000 14.500 (10.500) 58% 145,000 184,085 39,085 127% 5,917 - (5,917) 0% 325,000 325,000 - 100% 330,917 325,000 (5,917) 98% 12,120,546 12,575,807 455,261 104% Page 3 of 7 Variance with 2010 2010 Amended Budget - Actual Budget Actual Positive (Negative) Percent 28,000 31,032 3,032 111% 56,000 49,260 (6,740) 88% 13,000 11,591 (1,409) 89% 68,166 64,392 (3,774) 94% 15,000 15,889 889 106% 7,000 10,718 3,718 153% 150,152 202,885 52,733 135% 29,000 35,918 6,918 124% - 33,037 33,037 n/a 1,382,131 1,531,701 149,570 111% 115,000 81,369 (33,631) 71% 67,000 44,837 (22,163) 67% 182.000 126.206 (55.794) 69% 90,000 144,120 54,120 160% 30,000 25,465 (4,535) 85% 25.000 14.500 (10.500) 58% 145,000 184,085 39,085 127% 5,917 - (5,917) 0% 325,000 325,000 - 100% 330,917 325,000 (5,917) 98% 12,120,546 12,575,807 455,261 104% Page 3 of 7 o T - City of Prior Lake General Fund Expe nditures As of 12/31/2010 (Unaudited) General government 41110 Mayor & council 41130 Ordinance 41320 Administration 41330 Boards & commissions 41410 Elections 41520 Finance 41540 Internal auditing 41550 Assessing 41610 Legal 41820 Personnel 41830 Communications 41910 Comm development/natural res 41920 Technology 41940 Buildings & plant Total general government Public safety 42100 Police 42200 Fire 42400 Building /transportation services 42500 Emergency management 42700 Animal control Total public safety Public works 43050 Engineering 43100 Street 43400 Central garage Total public works Culture /recreation 45100 Recreation 45200 Parks 45500 Libraries Total culture /recreation Urban & economic development 46500 Economic development Total urban /economic dev 49303 Transfers to other funds 49999 Contingency reserve PRELIMINARY as of 0211612011 Variance with 2010 2010 Budget - Actual Budget Actual Positive (Negative) Percent 65,453 62,595 2,858 96% 7,000 3,442 3,558 49% 351,576 355,192 (3,616) 101% 12,474 7,409 5,065 59% 7,167 11,082 (3,915) 155% 300,327 302,972 (2,645) 101% 28,200 25,190 3,010 89% 108,200 106,908 1,292 99% 385,000 280,328 104,672 73% 131,540 123,046 8,494 94% 107,382 104,462 2,920 97% 252,563 235,930 16,633 93% 146,597 135,942 10,655 93% 439,126 370,566 68,560 84% 2,342,605 2,125,064 217,541 91% 3,072,315 2,972,404 99,911 97% 862,159 796,624 65,535 92% 363,796 365,948 (2,152) 101% 7,500 2,092 5,408 28% 35,844 28,242 7,602 79% 4,341,614 4,165,310 176,304 96% 375,022 375,092 (70) 100% 1,032,659 1,009,112 23,547 98% 329,994 346,394 (16,400) 105% 1,737,675 1,730,598 7,077 100% 403,502 367,806 35,696 91% 1,310,084 1,311,973 (1,889) 100% 91,067 66,355 24,712 73% 1,804,653 1,746,134 58,519 97% 44,401 41,150 3,251 93% 44,401 41,150 3,251 93% 1,780,600 1,781,843 (1,243) 100% 69.000 6.450 62.550 9% Total expenditures 12,120,546 11,596,549 523,997 96% Page 4 of 7 oi rxro4r City of Prior Lake Water & Sewer Fund As of 12/31/2010 v�N,sSO�P (Unaudited) 2010 Budget 2010 Actual PRELIMINARY as of 0271612011 Variance with Budget - Actual Positive (Negative) Percent Operating revenues Personnel & current expenses 144,000 9,188 134,812 Charges for services - water 41520 Finance 123,870 120,393 3,477 37100 Water revenues 2,138,750 1,998,335 (140,415) 93% 37110 Capital facility revenue 450,000 463,710 13,710 103% 37140 Door hanger charges - 18,125 18,125 n/a 37150 Water reconnect charges 9,000 3,655 (5,345) 41% 37160 Penalties 70,963 67,104 (3,859) 95% 37170 Water meters 26,000 60,402 34,402 232% 37175 Pressure reducers 8,225 11,610 3,385 141% 37180 Frost plates - 53 53 n/a 37190 Misc revenue adjustments - (251) (251) n/a 37750 Connection fee - water - - - n/a Total water revenues 2,702,938 2,622,743 (79,997) 97% Charges for services - sewer 37102 Sewer revenues 1,916,250 1,061,462 (854,788) 55% 37104 MCES revenues - 971,900 971,900 n/a Total sewer revenues 1,916,250 2,033,362 117,112 106% Miscellaneous revenues 36210 Interest earnings 100,000 174,968 74,968 175% 36212 Miscellaneous - 3,162 3,162 n/a 36225 Unrealized inv. gain (loss) - - n/a Total miscellaneous revenues 100,000 178,130 78,130 178 Total revenues 4,719,188 4,834,235 115,245 102% Operating expenses 495,000 205,038 289,962 41% Personnel & current expenses 144,000 9,188 134,812 6% 41520 Finance 123,870 120,393 3,477 97% 49400 Water 1,518,521 1,378,899 139,622 91% 49450 Sewer 2,090,547 1,966,696 123,851 94% Total operating expenses 3,732,938 3,465,988 266,950 93% Capital improvements 49400 Water improvements 495,000 205,038 289,962 41% 49450 Sewer improvements 144,000 9,188 134,812 6% 49005 CIPP pipe slip lining 150,000 114,252 35,748 76% Total capital improvements 789,000 328,478 460,522 42% 49303 Transfers to other funds 1,054,796 1,801,652 (746,856) 171% Total expenses 5,576,734 5,596,118 (19,384) 100% Net change (857,546) (761,883) Page 5 of 7 n0 FR1,0 City of Prior Lake Water Quality Fund As of 12/31/2010 PRELIMINARY as of 0211612011 MtNNHSOOA (Unaudited) 225,000 180,032 44,968 80% 49303 Transfers to other funds Variance with Total expenses 443,367 500,627 (57,260) 113% 2010 2010 Budget - Actual Budget Actual Positive (Negative) Percent Operating revenues Charges for services - storm water 37120 Water quality revenue 425,000 434,828 9,828 102% 37160 Penalties 60 Total water quality revenues 425,000 434,888 9,828 102% Miscellaneous revenues 36210 Interest earnings 36225 Unrealized Inv Gain (Loss) Total miscellaneous revenues 17,737 17,737 n/a - - - n/a 17,737 17,737 n/a Intergovernmental Revenue 33610 County & City Grants /Aids - 18,171 18,171 n/a 33633 Watershed Dist Grants /Aids - 30,987 30,987 n/a Total intergovernmental revenues - 49,158 49,158 n/a Total revenues 425,000 501,783 76,723 118% Operating expenses Personnel & current expenses 49420 Water quality 218,367 209,492 8,875 96% Capital improvements 49420 Water quality 225,000 180,032 44,968 80% 49303 Transfers to other funds - 111,103 (111,103) n/a Total expenses 443,367 500,627 (57,260) 113% Net change (18,367) 1,156 Page 6 of 7 OF FR`O City of Prior Lake tz Transit Fund As of 12/31/2010 PRELIMINARY as of 0211612011 y lNxeso� P (Unaudited) Variance with 2010 2010 Budget - Actual Budget Actual Positive (Negative) Percent Operating revenues Charges for services - transit revenue 38400 Bus fares 90,000 116,184 26,184 129% 38422 State transit aid 444,661 495,232 50,571 111% Total transit revenues 534,661 611,416 76,755 114% Total revenues 534,661 611,416 76,755 114% Operating expenses Personnel & current expenses 49804 Transit services 863,837 554,248 309,589 64% Capital improvements 49804 Capital improvements 280,636 91,734 188,902 33% Total expenses 1,144,473 645,982 498,491 56% Net change (609,812) (34,566) Page 7 of 7