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Home My WebLink About4D - Third Q. Budget Report STAFF AGENDA REPORT DATE: 4D RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROV AL OF 3RD QUARTER BUDGET REPORT AND OVERVIEW OCTOBER 21, 1996 AGENDA #: PREPARED BY: SUBJECT: INTRODUCTION: 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 3rd Quarter Budget Report is a document entitled "Budget Report Overview" that is intended to satisfy your request. The "overview" provides information related to those areas within the budget that have experienced exceptions 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 supp to the Quarterly Budget Report and enhance your un rstanding of performance results. Please feel free to contact me a extension 204 for more information. 16200 EugiecCreek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER BUDGET REPORT OVERVIEW (1996 3rd Quarter Budget Report) Expenditures: General Government . Mayor & Council expenditures are under budget because the allowance ($3400) for the professional services account has not been used due to the fact that a facilitator for the Council annual workshop was not utilized. We anticipate that this account will be expended to provide consulting services from Lonnie Helgeson. . Expenses associated with Boards and Commissions and Elections are typically not incurred until the latter part of the budget year Le., December planning commission per diems, fall elections, therefore the minimal amounts. . City Attorney costs are at 92% of budget. General legal services (122%) are significantly above projections primarily due to approximately $40,000 of incurred billings attributed to labor contract negotiations, a monthly retainer which is higher than paid in previous years plus litigation activity has increased. Offsetting these increased costs are lower prosecution costs (450/0) due to positive restitution cost recovery. . Personnel expenditures are up due to substantial employment hiring costs Le., advertisements, testing etc. In addition, professional services utilization attributed to labor relations is almost double the original allocation. . Planning department expenditures are only at 56% because their printing and professional service account balance of $22,750 remain largely unexpended to date. These dollars are scheduled to be used later in the year during the process of amending the subdivision and zoning ordinances and updating maps. . Data Processing expenses are somewhat lower than projected because the majority of the capital dollars for equipment and building improvements have not been spent to date. Present plans are to use the remaining data processing capital dollars to provide upgraded systems for the Police Department and for the central server. . General Government totals are in general conformance with budget estimates. Public Safety . Unfilled patrol vacancies for the major portion of the year is responsible for the 71% Police Department outcome at third quarter which also has resulted in extensive overtime costs. . Fire Department expenses are running under at 42% because over 50% of department costs are attributed to volunteer and pension contribution which is paid as an annual lump sum at year end. . Animal control does not represent a full quarter of service because they are billed one month in arrears. . Public Safety totals are in general conformance with budget estimates. Public Works . Engineering expenses are lagging primarily due to the fact that the public works director position has remained unfilled since June 1 st and only 17% of their professional service line item category has been expended which is normally reserved for consulting engineering fees that are needed for special projects. . Street Department expenses are down due to favorable experience in their major service related categories and because expenditures for stockpiling of sand and gravel for the upcoming winter season do not occur until the final quarter of the year. . Public Works totals are somewhat under budget estimates due to the above referenced factors. BR0396.DOC Culture- Recreation · Recreation program expenditures represent a budget performance of 81 % that is higher than the 75% variance as a result of increased recreation program participation. · Park Department expenditures of 87% are somewhat higher than budget projections because fairly significant expenditures were incurred this summer, across the board, in upgrading and maintaining equipment and community/neighborhood park structures. For the balance of the year expenditures are planned to be significantly curtailed. · Library results are favorable due to the fact that virtually no repair and maintenance costs were incurred during the first half of the year except from Contingency. · Culture-Recreation totals are fairly consistent with seasonal expectations and budget estimates. Expenditure Summary: 1996 General Fund 3 rd Quarter operating expenditures are running under budget and represent 67% of the total $5,447,005 operating budget. This actually compares with 1995 3rd quarter results of 65%. Expenditures during the 3rd quarter of the year amounted to 24% of budget allocation which is representative of a normal fiscal quarter. Revenues: · Property tax collection receipts are right at 50% which is on target since tax settlements basically only occur twice a year. No apparent tax delinquency problems exist. · Building permit activity accelerated during the summer building season as is evident by revenue collections of 96% compared to the 75% nominal for mid-year. As a result License & Permits revenue is considerably ahead of pace for the year at 103% of budget. Another reason that we have pushed past 100% is that the fee basis for mechanical and plumbing permits was changed considerably at the beginning of 1996 which increased this revenue source while the old method was utilized for budget purposes. · Intergovernmental revenue in the form of state aids and homestead and agricultural credit (HACA) is received in two installments in late July and end of December and no cutback problems are anticipated. In fact, state fire aid which comes from casualty insurance premium taxes increased substantially from the $40,000 budget estimate to over $61,000 actually received. This money is a direct pass-thru to the Fire Department to support their volunteer pension program so no actual gain is realized. · Charges for Services is near expectations at 74% of revenue realized. Again, building activity in the area of plan check fees contributed to this amount. Also several categories such as the cable franchise fee, tower antenna rental fees etc. have already been 100% collected for the year. · Fine revenue is averaging almost $5200 or $200 more per month than projected. · Development revenue in excess of $80,000 earned through the first three quarters of the year exceeds the entire $35,000 budgeted for the year. · Other Financing Sources primarily consists of the $175,000 enterprise fund contribution transfer which will be transferred at year end. Revenue Summary: Revenues realized are slightly higher than typical at approximately 59% of budget which compares positively to the past five years which have shown a spread of 51-58% at the end of the third quarter. Because of the increase in building related revenues, an additional $30,000 has been authorized within Building Inspection for increased inspection services due to the higher building activity. BR0396.00C 3RD QUARTER BUDGET RECAP: Overall, the 1996 3rd quarter financial performance is fairly typical to past years. Contingency expenditures are running higher and will increase when payment to repair the roof structures of City Hall, Police Annex and the Library is made. Therefore the present Contingency balance of $86,000 will be reduced by approximately $50,000 for these repairs plus an additional $30,000 set aside to offset additional temporary building inspection costs. Also the management labor contract settlement is still pending. If concluded before year-end, retroactive pay compensation could result in higher 4th quarter personnel expenditures. *[3rd Quarter Budget Report represents expenditures and revenues to date and do not include outstanding appropriations or receipt expectations.] BR0396.00c