HomeMy WebLinkAbout5E - 2003 4th Quarter Budget
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
STAFF AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
FEBRUARY 17,2004
5E
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF PRELIMINARY 2003 4TH
QUARTER BUDGET SUMMARY REPORTS AND GENERAL
FUND 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" for the General
Fund that is intended to satisfy your request. The 4th Quarter Budget
Reports shows the status of expenditures for entire 2003 for the
General Fund and Enterprise Funds consisting of the water & sewer,
water quality and transit funds.
The "overview" provides information related to those areas within
the general fund budget that have experienced exceptions (normally
:l: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 performance results. Please feel free to contact me
at 447-9841 for mor nformation.
REVIEWED BY:
Attachments:
1. Prelimi 003 4th Quarter Budget Summary Reports
2. Budget Report Overview (General Fund)
www.cityofpriorlake.com
H:IBUDGET\BRDOC
Phone 952.447.4230 / Fax 952.447.4245
Preliminary 2003 4th Quarter General Fund Budget Summary Report
Budget Amount Expended Percent
General Government 1,907,420.00 1,788,193.00 94%
Mayor & Council 50,973.00 51,542.00 101%
Ordinance 9,500.00 10,489.00 110%
City Manager 341,665.00 328,386.00 96%
Boards & Commissions 12,824.00 6,701.00 52%
Elections 3,553.00 4,590.00 129%
Director of Finance 111,658.00 109,361.00 98%
Accounting 130,045.00 129,377.00 99%
Internal Auditing 14,900.00 12,097.00 81%
Assessing 67,900.00 68,179.00 100%
Law 242,000.00 200,605.00 83%
Personnel 73,033.00 63,470.00 87%
Planning & Zoning 291,761.00 286,188.00 98%
Data Processing 92,700.00 88,054.00 95%
Buildings & Plant 270,713.00 229,253.00 85%
Central Garage 194,195.00 199,901.00 103%
Public Safety 2,973,617.00 2,921,025.00 98%
Police 2,106,318.00 2,030,252.00 96%
Fire & Rescue 394,259.00 421,025.00 107%
Building Inspection 428,880.00 435,396.00 102%
Civil Defense 28,150.00 18,595.00 66%
Animal Control 16,010.00 15,757.00 98%
Public Works 1,106,777 .00 1,192,980.00 108%
Engineering 515,660.00 520,644.00 101%
Street 591,117.00 672,336.00 114%
Culture-Recreation 1,676,189.00 1,477,126.00 88%
Recreation 687,565.00 502,125.00 73%
Parks 917,809.00 902,611.00 98%
Libraries 70,815.00 72,390.00 102%
Economic Development 67,359.00 40,899.00 61%
Debt Service 755,170.00 754,930.00 100%
Contingent Reserve 150,000.00 493,704.00 329%
Revenues 8,636,532.00 8,952,771.00 104%
General Property Taxes 5,179,013.00 4,827,670.00 93%
Licenses & Permits 665,275.00 1,015,996.00 153%
Intergovernmental Revenue 971,705.00 967,455.00 100%
Charges for Services 1,222,939.00 1,415,279.00 116%
Fines & Forfeits 131,100.00 114,099.00 87%
Miscellaneous Revenue 208,500.00 325,046.00 156%
Other Financing Sources 258,000.00 287,226.00 111%
Total Budget Expenditures 8,636,532.00 8,668,857.00 100%
Total Budget Revenues 8,636,532.00 8,952,771.00 104%
BR0403.xls 10:42 AM2/3/04
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Enterprise Funds
2003 4th Quarter Enterprise Funds Budget Summary Report
Budget Amount Expended Percent
Utility Fund 2,098,024.00 2,395,589.00 114%
Water 793,472.00 949,582.00 120%
Sewer 1,304,552.00 1,446,007.00 111%
Water Quality 282,674.00 240,771.00 85%
Transit Services 470,912.00 306,207.00 65%
Revenues 3,826,856.00 4,491,011.00 117%
Water Utility Revenues 3,181,945.00 3,681,623.00 116%
Water Quality Utility Revenues 174,000.00 251,071.00 144%
Transit Revenues 470,911.00 558,317.00 119%
Total Budget Expenditures 2,851,610.00 2,942,567.00 103%
Total Budget Revenues 3,826,856.00 4,491,011.00 117%
BUDGET REPORT OVERVIEW
(2003 4th Quarter Budget Report)
Expenditures:
General Government
. Ordinance expenses were up at 110% because of higher legal notice expenses
associated with annexation proceedings and public hearings due to an increased level
of project activity during the year.
. Boards and Commissions expenses were significantly less at 52% of budget because
of commissioner vacancies and cancelled meetings.
. Elections was higher at 129% because of voter notification costs that were incurred
thru Scott County and printing of new precinct maps as a result of the City
redistricting its voting precincts.
. Internal Auditing totals of 81 % represented completion of audit expenditures for the
year however not all the money set-aside for GASB 34 was needed this year.
. General legal expenditures of $126,370 were under the $146,000 budget estimate as
litigation costs were limited while prosecution costs of $74,232 were substantially
lower than the budget amount of $96,000. 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 83% for the year and an aggregate savings of over $41,000.
. Personnel expenses of 87% were somewhat less than normal as expenditures
associated with professional services and public information categories were not fully
expended.
. Bldgs & Plant expenditures of 85% came in significantly under budget because the
City received a property casualty insurance rebate of nearly $25,000 as a result of our
excellent claims experience with the LMCIT.
. Remaining categories were in conformance with budget estimates with overall
General Government budget performance of 94%.
Public Safety
. Police Department expenses are slightly below at 96% because the department had
one open patrol officer position that has now been filled, which temporarily reduced
personnel expenses within the department.
. Fire Department expenses of 107% was over budget primarily because of the large
increase in the 2% insurance contribution payment that the City receives as a pass-
thru payment to the relief association from the State of Minnesota which was almost
$38,000 more than expected because of the insurance industry's large homeowner
premium increases that occurred this past year. This was actually beneficial to the
department relief association.
. Civil Defense costs of 66% 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 performance was a favorable 98% for the year in view of
the fact that it accounts for the major public service category and a third of the city's
entire general operating budget.
Public Works
. Street Department expenses of 114% were high due to a substantial amount of street
patching that occurred this past summer that represented 3-4 times the patching work
that the City normally undertakes in a typical summer.
. Public Works overall total of 108% was somewhat above budget estimates.
Br0403.doc
Culture-Recreation
. Recreation Department was under at 73% due to the elimination of the remaining
expenses associated with the dance program that was privatized mid-year.
. Parks Department nearly matched budget estimates at 98%.
. Library results came in marginally higher at 102% of budget because of an unusual
repair cost in the amount of $10,000 for the replacement of an air conditioning
coolant line that was leaking below ground.
. Culture-Recreation totals of 88% were somewhat below budget estimates.
Economic Development
· The budget expenditure variance occurred within the categories of professional
services and land acquisition that were unexpended.
. Economic Development totals of 61 % were below budget estimates.
Debt Service
. Debt Service totals were in general conformance with budget estimates at lOa%.
ContinJ;!;ent Reserve
. Nine Contingency related expenditures have occurred, four of which involved
insurance deductible payments made to the LMCIT, $5,595 for professional services
provided for the document imaging system, $11,957 for the new precinct counter and
ballot booths and $20,414 for renovation repairs on the fire truck aerial apparatus,
$200,000 senior housing assistance contribution to Keystone and $238,000 Vierling
condemnation settlement. On an aggregate basis all Contingency expenditures totaled
just under $494,000.
Expenditure Summary:
Total unaudited 2003 General Operating Budget expenditures are projected to be
$8,688,857 when including outstanding encumbrances. This amount represents 101 % of
the approved 2003 City of Prior Lake Operating Budget ($8,636,532). These totals
compare with actual budgetary performance of 102%, 105%, and 99% for the preceding
years of 2002, 2001, and 2000. Overall, the two major Contingency expenditures
resulted in total General Fund expenditures exceeding budget by less than 1 %.
Revenues:
. Current property tax collections resulted in a 91 % collections rate. This low
collections rate is the result of the non-payment by the State of Minnesota of the
market value credit aid. When adding in delinquent receipts of past years the City
realized 93% of its 2003 property tax levy.
. License & Permit fees were well ahead of projections at 221 % as building permit
activity remained brisk with 516 units constructed in 2003 (2nd highest on record).
This resulted in all building related revenue sources to exceed full year estimates by
nearly $350,000 and accounted for virtually the entire increase.
. Intergovernmental revenue was right at budget projection of 100% as the loss ofLGA
was offset by other county and state grants that were received.
. Charges for Services were significantly above expectations at 116% of revenue
realized. The difference was primarily the result of plan check fees generating an
additional $190,000 of revenue due to the above referenced level of building permits.
Br0403.doc
. Fine revenue came in at 87% of budget. County court fine receipts amounted to
$87,000 or $18,000 less than estimated while the Scott Joint prosecution efforts
matched restitution recovery exactly at a projected $26,000.
. Miscellaneous Revenue was up considerably at 156% due to the continued strength of
developer agreement revenue of $142,000 that exceeded the standard budget estimate
of $50,000. This was the result of several large development phases coming on line in
2003. Plus the city continued positioning its investments more aggressively in terms
of longer maturities that accounted for interest earnings of more than $31,000 than
projected.
. Other Financing Sources revenue exceeded budget estimate at 111 % as a result of
increased sale of equipment during the year.
Revenue Summary:
Total 2003 General Operating Budget revenues are projected to be $8,952,771. This
amount represents 104% of the City of Prior Lake's $8,636,532 General Operating
Budget. These totals compare with actual budgetary performance of 120%, 117%, and
112% respectively for the preceding years of 2002, 2001 and 2000 All four years were
reflective of our extremely strong building economy. The single significant difference
when comparing this year to the last few years would be the loss of state aid in 2003.
4th QUARTER BUDGET RECAP:
Overall, the 2003 budgetary financial performance was very close to expectations on
both the revenue and expense side, as the City's General Fund balance will have
increased by approximately $265,000 to a preliminary unaudited position of $4,130,275
as the results of revenues exceeding expenditures. This general fund balance amount
represents a reserve of 47% based upon the current annual budget. The above figures are
not final. As soon as the City's 2003 financial audit is completed in May, Staff will
report the actual fund balance increase.
The largest four (3) contributing factors to the 2003 preliminary fund balance growth of
$265,000, (net of$410,000 LGA loss), are indicated as follows:
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i 3. ! Facility Rental increase j $45,451.00 !
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It is important to recognize that all three revenue items are growth oriented and
extremely elastic. While Prior Lake has experienced impressive building growth that has
supported such revenue levels are not likely to be sustained over the long term.
These higher than expected revenues are well timed given: 1) the LGA and Market
Value aid losses that Prior Lake experienced in 2003; 2) anticipated growth-related
expenditures including the need for a police station/city hall community center and 3)
other transportation and development related expenditures the city will need to consider.
Because of this market uncertainty, and the certainty of a number of these expenditure
obligations, it is especially important that the City of Prior Lake maintain its financial
strength through a healthy general fund balance.
Brtl403.doc