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HomeMy WebLinkAbout5D - 4th Q. Budget Summary 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 STAFF AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: FEBRUARY 7, 2005 5D RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROV AL OF PRELIMINARY 2004 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 all 12 months of activity 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 ::1:5% 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. Attachments: The "Budget Report Overview" is intended to serve as narrative support to the Quarterly Budget Report and enhance your understanding of per.ro ance results. Please feel free to contact me at 447-9841 for more' formation. I \~------- 1. 2004 ~~ na 4th Quarter Budget Summary Reports 2. BUdg~ort Overview (General Fund) REVIEWED BY: www.cityofpriorlake.com H\BUDGET\BRDOC Phone 952.447.4230 / Fax 952.447.4245 T 2004 4th Quarter General Fund Budget Summary Report Budget Amount Expended Percent General Government 1,772,691.00 1,680,895.00 95% Mayor & Council 49,313.00 51,314.00 104% Ordinance 9,500.00 10,407.00 110% City Manager 290,413.00 278,917.00 96% Boards & Commissions 9,324.00 8,009.00 86% Elections 10,734.00 13,201.00 123% Director of Finance 118,888.00 114,916.00 97% Accounting 143,052.00 128,669.00 90% Internal Auditing 13,400.00 16,390.00 122% Assessing 78,100.00 78,115.00 100% Law 236,000.00 259,398.00 110% Personnel 73,696.00 83,006.00 113% Communications 110,609.00 103,210.00 93% Planning & Zoning 231,004.00 200,281.00 87% Data Processing 107,525.00 96,163.00 89% Buildings & Plant 291,133.00 238,899.00 82% Public Safety 3,120,429.00 3,048,537.00 98% Police 2,177,947.00 2,095,658.00 96% Fire & Rescue 440,753.00 488,156.00 111% Building Inspection 458,069.00 431,906.00 94% Civil Defense 27,650.00 17,060.00 62% Animal Control 16,010.00 15,757.00 98% Public Works 1,382,553.00 1,422,842.00 103% Engineering 551,254.00 547,610.00 99% Street 595,763.00 649,504.00 109% Central Garage 235,536.00 225,728.00 96% Culture-Recreation 1,385,205.00 1,372,134.00 99% Recreation 358,088.00 324,308.00 91% Parks 954,782.00 969,228.00 102% Libraries 72,335.00 78,598.00 109% Economic Development 245,432.00 172,214.00 70% Debt Service 770,260.00 770,228.00 100% Contingent Reserve 75,000.00 91,734.00 122% Revenues 8,751,570.00 9,095,471.00 104% General Property Taxes * 5,261,594.00 5,361,841.00 102% Licenses & Permits 843,313.00 814,614.00 97% Intergovernmental Revenue 955,589.00 1,030,728.00 108% Charges for Services 1,125,374.00 1,170,583.00 104% Fines & Forfeits 115,200.00 151,592.00 132% Miscellaneous Revenue 188,500.00 302,933.00 161% Other Financing Sources 262,000.00 263,180.00 100% Total Budget Expenditures 8,751,570.00 8,558,584.00 98% Total Budget Revenues 8,751,570.00 9,095,471.00 104% * adj. for $365,406 market value aid cut Br0404.xls 4:05 PM1/28/05 Enterprise Funds 2004 4th Quarter Enterprise Funds Budget Summary Report Budget Amount Expended Percent Utility Fund 2,513,915.00 2,378,785.00 95% Water 966,156.00 970,169.00 100% Sewer 1,547,759.00 1,408,616.00 91% Water Quality 294,077.00 214,658.00 73% Transit Services 493,876.00 322,458.00 65% Transfers 616,000.00 615,114.00 100% Revenues 4,396,376.00 5,043,770.00 115% Water/Sewer Utility Revenues 3,572,500.00 4,129,996.00 116% Water Quality Utility Revenues 330,000.00 323,189.00 98% Transit Revenues 493,876.00 590,585.00 120% Total Budget Expenditures 3,917,868.00 2,915,901.00 74% Total Budget Revenues 4,396,376.00 5,043,770.00 115% BUDGET REPORT OVERVIEW (2004 4th Quarter Budget Report) Expenditures: General Government · Ordinance expenses were up at 110% because of higher publication expenses due to a significant increase of ordinance amendments. · Boards and Commissions expenses were less at 86% of budget primarily because of a lack of EDA meetings. · Elections was higher at 123% because of adding additional election judges as result of the City redistricting its voting precincts to accommodate the record 2004 election turnout. · Accounting expenditures ended lower at 90% of budget due to the fact that the city did not incur banking service fees by Wells Fargo as we opted for an earnings credit in lieu of interest earned on our funds to offset service fees. · Internal Auditing results were completed at 122%. GASB 34 compliance requirements caused our financial report to exceed budget allocation by approximately $3,000. · General legal expenditures of $150,292 were under the $152,000 budget estimate as litigation costs were limited while prosecution costs of $109,106 were substantially higher. This occurred because the budget for the prosecution did increase significantly for this year. The overall legal expense category outcome is 110% of the year to date budget. · Personnel was over at 113% because of the position transition overlap due to the retirement of the City's former personnel director and also a number of employee positions opened up at year-end, which resulted in higher employment advertisement costs. · Communications was somewhat under at 93% because this past year was the first year for department budgeting purposes and some fine-tuning would normally be expected considering no historical cost trends were available. · Planning & Zoning expenses of 87% ended under budget because the department's planning coordinator position was open for a short period of time, which temporarily reduced personnel expenses within the department and expenditures associated with professional services for the Comprehensive Plan update were partially incurred. · Data Processing was under estimates at 89% as the city's computer hardware service contract costs were reduced this year. · Bldgs & Plant expenditures of 82% came in significantly under budget because the City received a property casualty insurance rebate in excess of $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 of95%. Public Safety · Police Department expenses were slightly below at 960/0 because the department had an open patrol officer position, which temporarily reduced personnel expenses within the department. . Fire Department expenses of 111 % 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 nearly $63,000 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. Br0404.doc · Building Inspection expenditures were under at 94% due to considerably less overtime costs incurred as permit activity fell nearly 30% from the previous year level. · Civil Defense costs of 62% 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. Also we received a favorable bid for the civil defense siren that is annually programmed for replacement. · 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 more than a third of the city's entire general operating budget. Public Works · Street Department expenses of 109% were high due to a substantial amount of street patching that occurred this past summer that represented close to twice the amount of street patching work that the City normally undertakes in a typical summer. · Public Works overall total of 103% was somewhat above budget estimates. Culture- Recreation · Recreation program expenses totaled 91 % of budget. Two major categories that were under-exp'ended were seasonal personnel expenses and concession. Both were affected by the relatively cool summer, which caused beach attendance to be down. · Parks Department was slightly above budget estimates at 102%. · Library results came in marginally higher at 109% of budget because of the replacement of the heating/air conditioning temperature control box and the increased gas utility heating costs that resulted because of the malfunctioning sensors. · Cultural-Recreation totals were in general conformance with budget estimates at 99%. Economic Development · The budget expenditure variance occurred within the categories of professional services and land acquisition that were unexpended. · Economic Development totals are below budget estimates at 70%. Debt Service · Debt Service totals were in general conformance with budget estimates at 100%. Contingent Reserve · The following four Contingency related expenditures occurred in 2004: 1. $4,000 - Joint public training facility 2. $14,186 - LMCIT insurance deductible payments 3. $30,412.- Zamboni garage (RS 04-131 authorized $20,000) ... majority of overage due to improved bituminous service driveway access that was not identified under original estimate. 4. $43,136 - Downtown streetscape improvements (RS 04-112 authorized $44,600). On an aggregate basis all Contingency expenditures totaled just under $92,000 when compared to the Contingent Reserve appropriation of $75,000. Expenditure Summary: Total unaudited 2004 General Operating Budget expenditures are projected to be $8,575,000 when including outstanding encumbrances. This amount represents 98% of the approved 2004 City of Prior Lake Operating Budget ($8,751,570). These totals Br0404.doc ..----,-.,.~,. .O_'_I~___'__'_'_O___ compare with actual budgetary performance of 100%, 102%, and 101% for the preceding years of2003, 2002, and 2001. Revenues: · Current property tax collections resulted in a 93% 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 950/0 of its 2004 property tax levy (102% when factoring out MVHC). · License & Permit fees were slightly under projections at 97% as building permit activity declined with 300 units constructed in 2004 compared with 516 units last year. · Intergovernmental revenue was above budget projection at 108% basically due to the large state fire insurance premium aid increase to the fire department. . Charges for Services were above expectations at 104% of revenue realized. The difference was primarily the result of an increase in zoning fees and facility rental income (water tower antenna leases). . Fine revenue of 132% was very strong because of higher prosecution restitution payments. . Miscellaneous Revenue was up considerably at 161 % due to the continued strength of developer agreement revenue of $117,000 that exceeded the standard budget estimate of $50,000. This was the result of a handful of large developments. Plus the city continued positioning its investments more aggressively in terms of longer maturities that accounted for interest earnings of almost $42,000 higher than projected. . Other Financing Sources revenue matched budget estimate at 100%. Revenue Summary: Total 2004 General Operating Budget revenues are projected to be $9,135,000. This amount represents 104% of the City of Prior Lake's $8,751,570 General Operating Budget. These totals compare with actual budgetary performance of 104%, 121%, and 116% respectively for the preceding years of 2003, 2002 and 2001. All four years were reflective of our extremely strong building economy. 4TH QUARTER BUDGET RECAP: Overall, the 2004 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 an estimated $560,000 to a preliminary unaudited position of $4.67 million as the results of revenues exceeding expenditures. This general fund balance amount represents a reserve of 48% based upon the current annual budget. The above figures are not final. As soon as the City's 2004 financial audit is completed in May, Staff will report the actual fund balance increase. The six (6) most significant contributing factors to the 2004 projected fund balance growth of $560,000 are indicated as follows: f....L.......T...Fac'1i1tY..~entaf'1nc~ea.se...........................................................T.............$ii~.6'6'6jj6'..1 r...i:.........r.ionlng..fees..lnc~e.ase.................................................................T.............$i8.~.776.:6'6....! [~:;::::::::J::!?~~!.~:~:(~~~~?~~:::~~~~~~:~:~:::::::::::::::::::::::::::::::::::::::::::::::::::r::::::::::::~4.:f:~:~:~~:~~~] ~ 4. ~. State fire aid increase ~ $62,867.00 ~ L~:~:::::::::!:::p~y~~?P.:~!.::~W:~~~~?!::~?:~!.~~:~:~:::::::::::::::::::::::::::::::::::I::::::::::::~~?:~:~:~?:~~~::::I ~ 6. I Expenditure under-run I $176,570.00 l [::::::::::::1::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::f??~r:;:;:::.l...........~~~.~.~.??..~.:.~g....! Br0404.doc " ~'''''''''''''"",",____~&"_~__''""~..i">"'_""'''''.''''''~''''';,,",,,,,,,,,~~,~'.""'.,,__,+..........~.,,~~.~_,,"" '"""_.''''_K''''l"'''~_'''"''''''~'-'-''''''''''''''''''-'''~-' ~"..-""'_.""_.,.,, ....,."_'..._"'.......-..-...'"....,.__....~..-.-'~""""__.,-*'-."''''...'-~"c'''''..".'"'~".._,~._.,.,,_......~.""~__.-.,,~"._.~"'..l<.d____~_,.,."""'~""'-".., Br0404.doc These higher than expected revenues are well timed given: 1) the predicted Market Value aid losses that Prior Lake may experience again in 2005 and 2006; 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.