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16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
JULY 17,2006
50
Ralph Teschner, Finance Director
CONSIDER APPROVAL OF 2006 2ND QUARTER BUDGET SUMMARY
REPORTS AND GENERAL FUND OVERVIEW
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 2nd Quarter Budget Report is a document entitled
"Budget Report Overview" for the General Fund that is intended to satisfy your
request. The 2nd Quarter Budget Reports shows the status of expenditures for
the first 6 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 :i: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 highlight the performance results of the General
Fund budget. Please feel free to contact me at 447-9841 for more information.
A motion as part of the consent agenda to approve the 2006 2nd Quarter
Budget Report as submitted.
1. 2006 2nd Quarter Budget Summary Reports
2. Budget Report Overview (General Fund)
www.cityofpriorlake.com
H\BUDGET\BRdoc
Phone 952.447.4230 / Fax 952.447.4245
BUDGET REPORT OVERVIEW
(2006 2ND Quarter Budget Report)
Expenditures:
General Governrnent
· City Manager costs are marginally under at 44% because our AMM and League of
Minnesota Cities dues have not yet been billed to the City which total more than $20,000.
· Expenses associated with Boards and Commissions, Elections and Assessing are
typically not incurred until the latter part of the budget year Le., December EDA and
planning commission per diems, fall election judge salaries and mid-year contract
assessing billing, therefore the low amounts.
· Internal Auditing results are complete at 101 %.
· Assessing contract service expenditures are complete for the year and represent 98%
of budget.
· Personnel expenses of 31 % are somewhat less than normal as expenditures associated
with professional consultant services, specifically for the City's updated Comparable
Worth salary study, have not yet been expended.
· Communication expenditures are lower than budget at 43% because postage and
expenses associated with the proposed annual report and miscellaneous brochure
mailings have not been incurred yet, plus only three Wavelength publication invoices
has been processed to date.
· Planning & Zoning expenses of 45% is lower than budget because the professional
services category has not been used to date.
· Bldgs & Plant is less at 39% because of our repair and maintenance service accounts
have largely been unexpended due to the demolition of the old city hall and will
continue to be abated until the new building is ready for move-in.
· General Government totals are in general conformance with budget estimates at
42%.
Public Safety
· Police Department expenses were slightly below at 48% because the department had
an open patrol officer and CSO position, which temporarily reduced personnel
expenses within the department.
· Fire Department expenses are fairly low because 65% of department costs are
attributed to volunteer compensation and pension contribution, both of which are paid
as an annual lump sum near year-end.
· Civil Defense costs are relatively low because the new Brooksville Hills siren
replacement has not yet been installed.
· 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 at 42%.
Public Works
· Street Department expenses of37% are low primarily because the bituminous overlay
and street seal-coating account allocation has not yet been spent.
· Central Garage is below projections at 42% because we are fortunate that no major
equipment service contract repairs occurred during the 15t half year of fleet operations.
· Public Works totals are in general conformance with budget estimates at 41%.
Culture-Recreation
· Due to the seasonal nature of recreation programs, their budget expenditures normally
lag during the 1st half of the year that accounts for their budget performance level of
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only 35%. Recreation's major activity levels occur during the summer months that
involve park programs, community events and instructor fees.
· Culture-Recreation totals are less than seasonal expectations and budget estimates at
44%.
Economic Development
· The budget expenditures are significantly under as the general professional services
and land options appropriation are unexpended to date.
· Economic Development totals are under budget estimates at 33%.
Debt Service
. All general debt service bond payments are made during the months of June (interest
only) and December (principal/interest).
Contingent Reserve
. Two Contingency expenditures have occurred so far this year;
1. $28,506.00 has for the LMCIT insurance reimbursement payment for the Ryan
conditional use permit litigation.
2. $90,000 dump clean-up restitution to Scott County.
Expenditure Summary:
2006 General Fund 2nd Quarter operating expenditures are on track and represent 43%
of the total $10,840,734 operating budget. This actually compares with similar 2005 2nd
quarter results of 39% when you allow for the temporary expenditure reduction measures
that were incorporated early in last year's budget.
Revenues:
. The current property tax settlement in June showed no apparent delinquency problem
as collections reached 49%. However the market value credit aid will not be paid
again by the State this year.
. License & Permit fees are somewhat above total projection at 56% as all business
license revenue has for the most part been received for the year.
. Intergovernmental revenue is under at 44% of the quarterly budget estimate because
the Fire and Police aid funded by the 2% surcharge on property and casualty
insurance premiums is not paid until September by the State of Minnesota.
. Charges for services are near expectations at 40% with the difference due to the
timing of franchise fee payments which occur shortly after the end of each quarter
and the project administration/engineering transfer which is recognized at year end.
. Fine revenue is actually averaging above projections at 59% since payments are in
arrears by One month.
. Miscellaneous Revenue is considerably above budget at 187% due to an increase in
development contract revenue during the quarter.
. Other Financing Sources primarily consists of the $250,000 enterprise fund
contribution transfer, which is recognized at year-end. However, this year the City did
recognize a one-time real estate sale transaction related to the downtown Hastings
Avenue property that pushed the performance outcome to 86%.
Revenue Summary:
Revenues realized are approximately 51 % of budget and is on average a little stronger in
relative comparison to the past five years that have shown a spread of 38-53% at
midyear.
1 ST QUARTER BUDGET RECAP:
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Overall, the 2006 2nd quarter fmancial performance is fairly typical to past years with no
significant expense variances or revenue shortfalls appearing other than noted. Building
related revenues are expected to fall off as permit activity is anticipated to continue its
short-term decline for the remainder of the year.
* [2nd Quarter Budget Report represents expenditures and revenues to date and do not
include outstanding appropriations or receipt expectations.]
2006 2nd Quarter General Fund Budget Summary Report
Budget Amount Expended Percent
General Government 2,145,109.00 996,206.00 46%
Mayor & Council 61,487.00 30,657.00 50%
Ordinance 12,000.00 5,720.00 4H%
City Manager 347,407.00 151,707.00 44%
Boards & Commissions 13,337.00 323.00 2%
Elections 15,356.00 0.00 0%
Director of Finance 125,666.00 63,092.00 50%
Accounting 162,658.00 78,048.00 48%
Internal Auditing 17,100.00 17,223.00 101%
Assessing 92,100.00 90,000.00 98%
Law 283,000.00 131,026.00 46%
Personnel 98,478.00 30,184.00 31%
Communications 129,131.00 55,658.00 43%
Planning & Zoning 333,259.00 149,433.00 45%
Data Processing 160,735.00 78,880.00 49%
Buildings & Plant 293,395.00 114,255.00 39%
Public Safety 3,773,432.00 1,589,436.00 42%
Police 2,603,682.00 1,260,499.00 48%
Fire & Rescue 611,261.00 69,359.00 11%
Building Inspection 499,989.00 244,510.00 49%
Civil Defense 27,300.00 1,223.00 4%
Animal Control 31,200.00 13,845.00 44%
Public Works 1,603,914.00 660,011.00 41%
Engineering 556,403.00 258,706.00 46%
Street 775,672.00 286,775.00 37%
Central Garage 271,839.00 114,530.00 42%
Culture-Recreation 1,655,038.00 729,764.00 44%
Recreation 380,113.00 131,327.00 35%
Parks 1,185,130.00 553,625.00 47%
Libraries 89,795.00 44,812.00 50%
Economic Development 173,206.00 57,195.00 33%
Debt Service 1,290,035.00 458,330.00 36%
Contingent Reserve 200,000.00 118,506.00 59%
Revenues 10,840,734.00 5,577,146.00 51%
General Property Taxes 6,931,236.00 3,390,408.00 49%
Licenses & Permits 819,950.00 457,575.00 56%
Intergovernmental Revenue 1,127,864.00 498,724.00 44%
Charges for Services 1,349,784.00 546,485.00 40%
Fines & Forfeits 152,400.00 89,684.00 59%
Miscellaneous Revenue 197,500.00 370,172.00 187%
Other Financing Sources 262,000.00 224,098.00 86%
Total Budget Expenditures 10,840,734.00 4,609,448.00 43%
Total Budget Revenues 10,840,734.00 5,577,146.00 51%
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Enterprise Funds
2006 2nd Quarter Enterprise Funds Budget Summary Report
Budget Amount Expended Percent
Utility Fund 2,956,304.00 1,290,368.00 44%
Water 1,001,802.00 472,860.00 47%
Sewer 1,954,502.00 817,508.00 42%
Water Quality 355,926.00 49,000.00 14%
Transit Services 592,068.00 203,745.00 34%
Transfers 500,141.00 0.00 0%
Revenues 5,429,638.00 2,520,088.00 46%
Water Utility Revenues 4,500,750.00 2,079,295.00 46%
Water Quality Utility Revenues 336,820.00 178,165.00 53%
Transit Revenues 592,068.00 262,628.00 44%
Total Budget Expenditures 4,404,439.00 1,543,113.00 35%
Total Budget Revenues 5,429,638.00 2,520,088.00 46%