HomeMy WebLinkAbout4F - 2001 4Q Budget Report
STAFF AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
MARCH 6, 2002
4F
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROV AL OF PRELIMINARY 2001 4TH
QUARTER BUDGET REPORT AND OVERVIEW
DISCUSSION:
The City Council has directed Staff to prepare an accompanying
written narrative that would serve as an informational excerpt to the
quarterly budget reports. Attached to the 4th Quarter Budget Report
is a document entitled "Budget Report Overview" that is intended to
satisfy your request. The 4th Quarter Budget Report shows the status
of expenditures for all of 200 1.
The "overview" provides infom1ation related to those areas within
the budget that have experienced exceptions (normally :J:5%
variation) to the approved budget levels. The report identifies
revenue shortfalls and surpluses and includes a short explanation as
to the various reasons. Expenditures are also summarized on this
basis.
The "Budget Report Overview" is intended to serve as narrative
support to the Quarterly Budget Report and enhance your
understanding of perfom1ance results. Please feel free to contact me
at 447-9841 for more info 1ation.
Attachments:
REVIEWED BY:
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
H\BUDGETlBR.DOC AN EQUAL OPPORTUNITY EMPLOYER
Preliminary 2001 4th Quarter Budget Report
Budget Amount Expended Percent
General Government 1,698,4 70.00 1,634,228,00 96%
Mayor & Council 24,260.00 24,159.00 100%
Ordinance 11,000.00 8,342.00 76%
City Manager 274,301.00 263,160.00 96%
Boards & Commissions 9,528.00 7,573.00 79%
Elections 4,265.00 20,630.00 484%
Director of Finance 100,688.00 101,074.00 100%
Accounting 110,025.00 108,876.00 99%
Internal Auditing 14,415.00 11,700.00 81%
Assessing 50,725.00 51,069.00 101%
Law 253,400.00 220,988.00 87%
Personnel 79,932.00 79,546.00 100%
Planning & Zoning 242,296.00 235,768.00 97%
Data Processing 110,615.00 96,128.00 87%
Buildings & Plant 237,500.00 231,499.00 97%
Central Garage 175,520.00 173,716.00 99%
Public Safety 2,497,019.00 2,424,938.00 97%
Police 1,866,772.00 1,802,696.00 97%
Fire & Rescue 283,530.00 296,039.00 104%
Building Inspection 324,107.00 310,919.00 96%
Civil Defense 9,600,00 2,527.00 26%
Animal Control 13,010.00 12,757.00 98%
Public Works 934,128.00 901,151.00 96%
Engineering 473,792.00 434,883.00 92%
Street 460,336.00 466,268.00 101%
Culture-Recreation 1,182,468.00 1,268,474.00 107%
Recreation 442,381.00 513,433.00 116%
Parks 686,537.00 696,397.00 101%
Libraries 53,550.00 58,644.00 110%
Economic Development 49,527.00 352,564.00 712%
Debt Service 725,485.00 725,485.00 100%
Transit Services 379,950,00 379,950.00 100%
Contingent Reserve 50,000.00 194,171.00 388%
Revenues 7,517,047.00 8,776,790.00 117%
General Property Taxes 3,903,647.00 3,885,524.00 100%
Licenses & Permits 452,525.00 793,486.00 175%
Intergovenunental Revenue 1,804,635.00 1,803,029.00 100%
Charges for Services 852,640.00 1,249,109.00 146%
Fines & Forfeits 122,400.00 104,988.00 86%
Miscellaneous Revenue 148,200.00 595,494.00 402%
Other Financing Sources 233,000.00 345,160.00 148%
Total Budget Expenditures 7,517,047.00 7,880,961.00 105%
Total Budget Revenues 7,517,047.00 8,776,790.00 117%
8,0401 932 AM3/1/02
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BUDGET REPORT OVERVIEW
(2001 4th Quarter Budget Report)
Expenditures:
General Government
. Ordinance costs ended up under at 76% because of the limited number of ordinance
publications that occurred.
. Boards and Conm1issions expenses were significantly less at 79% of budget because of
commissioner vacancies and cancelled meetings.
. Election totals were outside budget parameters only because the City took advantage of
the 50% matching funds available thm Scott County to purchase new state of the art
precinct counters, at a cost just under $16,500, that will be interfaced to a central counter
at Scott County to provide instant ballot tabulation. This acquisition was approved by the
City Council and will be a huge improvement to the public because of the ilmnediate
accuracy verification of the ballot as it is entered into the ballot box.
. General legal expenditures of $142,360 was somewhat above the $131,000 budget
estimate while prosecution costs of $78,628 were substantially lower than the budget
amount of $122,400. This appears to have occurred because the activity level for Prior
Lake is below that of the other cities percentage wise and because Scott Joint
Prosecution distributes quarterly costs on a percentage basis, our share for the year
was less. This has resulted in the overall legal expense category outcome of 87% of
the year to date budget and an aggregate savings of over $32,000.
. Data Processing expenses have also come in lower at 87%, as our support expenditures
through CIT have been less than we anticipated, as the transition to third party computer
network support has been fairly successful and more cost effective. Also, fewer software
design modifications occurred during the year.
. Remaining categories were in c01~formance with budget estimates with overall
General Government budget peiformance of 96%.
Public Safety
. Police Department expenses were slightly under at 97% because the department had
several position openings during the year that temporarily reduced persOlmel expenses
within the department.
. Fire Department expenditures of 104% exceeded budget estimates primarily in two areas;
that of response hours that were up by approximately 3% while the second area was
simply a pass-tlml increase on the pension contribution that is received by the City in the
fonn of state aid and then reimbursed to the Fire Department Relief Association.
. Civil Defense costs were relatively low because of the lack of general repair service that is
typically caused by direct lightning strikes to the sirens that occasionally occur during the
year.
. Public Safety total budget peiformance was a favorable 97% for the year in view of
the fact that it accounts for the major public service categ01Y and a third of the city's
entire general operating budget.
Public Works
. Engineering Department expenses were similarly a little below at 92% because of the late
filling of the engineering tech position vacancy which temporarily reduced personnel
expenses within the department.
. Public Works overall total of96% was consistent with budget estimates.
Culture-Recreation
. Recreation Department dance program activities were much above expectations and ended
at 116% of YTD budget level. However park program registrations were also up
B,{)401
significantly at 132% of estimated revenue and exceeded those expenditures that are
revenue supported for the year.
. Library results were up at 110% of budget entirely due to gas utilities as the result of an
extremely large jump in energy prices at the beginning of last year.
. Culture-Recreation totals of 107% were somewhat above budget estimates,
Economic Development
. The budget expenditure variance is due to expenditures of nearly $317,000.00 for the
acquisition of the Hennen parcel located downtown, the Creekside Circle home purchased
as part of the Lakefront Plaza land exchange and the TJ. Towing parcel.
. Economic Development totals are under budget estimates at 72% upon excluding these
Council approved real estate transactions.
Contingent Reserve
. Four Contingency expenditures of approximately $5800 were incurred which involved
insurance deductible/settlement payments to the LMCIT. An additional $7200 was
appropriated by the Council for expenses associated with the Lakefront Park grand
opening celebration. And the largest expenses were partial condemnation award payments
of $125,800 to the Vierlings and $55,248 to Bodennan. These two actions pushed total
expenditures within the $50,000 Contingent Reserve in excess of$194,000.
Expenditure Summary:
Total unaudited 2001 General Operating Budget expenditures are projected to be $7,880,962
when including outstanding encumbrances. This amount represents 105% of the approved
2001 City of Prior Lake Operating Budget (7,517,047). These totals compare with actual
budgetary perfommnce of 99%, 100%, and 98% for the preceding years of 2000, 1999, and
1998.
Revenues:
. Current property tax collections resulted in a 98% collections rate that is on par with
previous years experience on average, When adding in delinquent receipts of past years
the City realized slightly less than 100% of its 2001 property tax levy.
. License & Permits revenue ended the year at 175% of budget. This occurred because
building pemlit activity was very strong, exceeding our building related revenue estimates
by a full 86%. A record number of pennits and valuation pushed new construction
revenue nearly $341,000 above building revenue projections that accounted for tile entire
increase.
. Intergovemmental revenue was right at 100% of budget.
. Charges for Services were significantly above expectations at 146% of revenue realized.
The difference was the primarily the result of five occurrences; zoning & subdivision
receipts of $45,000 were way above nonnal, plan check fees generated an additional
$159,000 of revenue due to the above referenced level of building pennits, park program
registrations, particularly in the dance program, exceeded estimated revenues by nearly
$80,000, a one-time project administration fee transfer adjustment accounted for an
increase of almost $84,000 and park admission fees doubled our estimates due to the hot,
dry sunmler that we experienced.
. Fine revenue was the only revenue source that fell short of expectations at 86% of budget.
. Miscellaneous Revenue was up extraordinarily at 402% due to developer agreement
revenue of $328,455 that has exceeded the standard budget estimate of $35,000. This was
the result of several large development phases coming on line in 2001. Plus the city's
investments were positioned more aggressively in temlS of longer maturities that
accounted for higher interest eamings of $134,000.
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. Other Financing Sources ended up at $148% because the City booked a property sale of
approximately $115,000 relating to the Mueller/HUD house swap associated with the
Lakefront Plaza senior project. The offsetting expenditure was recognized in the land
expense account of Economic Development Department.
Revenue Summal1':
Total 2001 General Operating Budget revenues are projected to be $8,776,790. This amount
represents 117% of the City of Prior Lake's $7,517,047 General Operating Budget. These
totals compare with actual budgetary perfonml11ce of 112%, 107% and 104% respectively for
the preceding years of 2000, 1999 and 1998,
4TH QUARTER BUDGET RECAP:
Overall, the 2001 budgetary financial perfom1ance was exceptional as the City's General
Fund balance will have increased by approximately $895,827 from $3,481,261 to a
preliminary unaudited position of $4,3 77 ,088 as the results of revenues exceeding
expenditures. This general fund balance amount represents a reserve of 57% based upon the
current ammal budget. The above figures are not final. As soon as the City's 2001 financial
audit is completed in May, Staff will report the actual fund balance increase.
The largest three (3) contributing factors to the 2001 preliminary budget surplus of $895,827 .r
are indicated as follows:
.. ........................................................................................................................................................
.+ J? ~~~!~~I:~p~~::~t.E~1.~t.~?:~~~I:~~~I:~I:~~~~. '
Developer agreeme.~1til:~E~~~~m
Interest eamings increase
..................................................................................~_..m................ . .............................,......
.........$5.00:027:00....1
.... ....................
$293,455.00 I
m$j~~;~~~:99.:.]
$927,705.00 I
Total."
These factors by themselves accounted for virtually I 00% of the total surplus that occurred in
2001. It is important to recognize that the first two revenue items are growth oriented and
extremely elastic. While Prior Lake has experienced impressive building growth that has
supported these large surpluses, such revenue levels are not likely to be sustained over the
long tenn. Also, interest eamings are expected to decline as interest rates have steadily fallen
to record low levels.
This higher than expected surplus is well timed given the deficit position that the State of
Mim1esota finds itself in. Depending upon the outcome of the Legislature's budget balancing
decisions, cities may experience significant state aid reductions in 2002 and 2003. Because of
this uncertainty, it is especially important that the City of Prior Lake maintain its financial
strength through a healthy general fund balance.
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