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Home My WebLink About5I - 1997 4th Q. Budget Report AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: Approved by: Attachment STAFF AGENDA REPORT 5 I RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROVAL OF PRELIMINARY 1997 4TH QUARTER BUDGET REPORT AND OVERVIEW MARCH 16, 1998 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 preliminary 4th Quarter Budget Report is a document entitled "Budget Report Overview" that is intended to satisfy your request. The Fourth Quarter Budget Report shows the status of expenditures for 12 months in 1997. The "overview" provides information related to those areas within the 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~ the Quarterly Budget Report and enhance your understa ing of performance results. Please feel free to contact me 'hJ. xle. n 204 for more infnrmation. H:IBUDGET\BR.DOC 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER 1997 Preliminary 4th Quarter Budget Report Budget Amount Expended Percent General Government 1,279,758.00 1,268,811.00 99% Mayor & Council 25,075.00 19,793.00 79% Ordinance 14,850.00 25,449.00 171% City Manager 227,061.00 230,441.00 101% Boards & Commissions 5,409.00 5,064.00 94% Elections 5,245.00 3,940.00 75% Director of Finance 85,407.00 87,383.00 102% Accounting 81,256.00 77,168.00 95% Internal Auditing 9,930.00 10,005.00 101% Assessing 34,100.00 34,167.00 100% Law 200,800.00 248,936.00 124% Personnel 70,392.00 70,473.00 100% Planning & Zoning 232,473.00 210,398.00 91% Data Processing 90,570.00 100,396.00 111% Buildings & Plant 197,190.00 145,198.00 74% Public Safety 2,146,723.00 2,078,422.00 97% Police 1,578,341.00 1,554,369.00 98% Fire & Rescue 190,993.00 219,711.00 115% Building Inspection 360,109.00 289,341.00 80% Civil Defense 6,050.00 4,044.00 67% Animal Control 11,230.00 10,957.00 98% Public Works 781,805.00 737,733.00 94% Engineering 443,756.00 383,198.00 86% Street 338,049.00 354,535.00 105% Culture-Recreation 957,155.00 968,059.00 101% Recreation 302,599.00 311,711.00 103% Parks 641,501.00 644,708.00 100% Libraries 13,055.00 11,640.00 89% Economic Development 52,146.00 52,456.00 101% Debt Service 484,960.00 484,589.00 100% Transit Services 301,171.00 301,171.00 100% Contingent Reserve 150,000.00 152,172.00 101% Revenues 6,153,718.00 6,252,733.00 102% General Property Taxes 3,171,148.00 3,148,546.00 99% Licenses & Permits 426,500.00 366,341.00 86% Intergovernmental Revenue 1,581,413.00 1,622,544.00 103% Charges for Services 599,750.00 603,374.00 101% Fines & Forfeits 60,000.00 78,582.00 131% Miscellaneous Revenue 128,200.00 240,949.00 188% Other Financing Sources 186,707.00 192,397.00 103% Total Budget Expenditures 6,153,718.00 6,043,413.00 98% Total Budget Revenues 6,153,718.00 6,252,733.00 102% BR0497XLS 9:44 AM3/9/98 BUDGET REPORT OVERVIEW (1997 Preliminary 4th 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. . Ordinance expenses ran over because a re-codification of all city ordinances has been initiated by the city attorney's office to update the city code. . Cumulative finance activities in the areas of finance, accounting, auditing and assessing totaled 99% of the budget estimate. . General legal fees of $183,290 were virtually the same as last year's expenditures of $185,164 as litigation activity was also similar to last year which was 35% higher than expected. Prosecution cost came in right at budget which when combined with general legal fees results in the overall City Attorney costs at 124% of budget. . Planning department expenditures was under by 9% because their professional service account was under expended by $9,000 and due to printing expenses which were not incurred because the zoning ordinance has not yet been approved for publication. . Data Processing expenses exceeded budget as a result of sourcing out technical support services that was necessary because of personnel turnover. This accounted for the entire $10,000 overrun. . Buildings & Plant costs were favorable this past year mainly due to the fact that the City once again received an exceptional dividend insurance premium return from the League of Minnesota Cities Insurance Trust Fund in excess of $36,000. . Remaining categories are in conformance with budget estimates with overall General Government budget performance of 98%. Public Safetv . Police Department outcome at 4th quarter was at 98%. The department was very near budget in most expenditure categories with four exceptions in the areas of overtime, workers comp insurance, professional services and vehicle maintenance totals. Overtime came in at nearly $110,000 compared to budget of $75,000. However this increase was more than offset by a decrease in regular personnel expenses as a result of the Police Chief position opening which wasn't filled until year-end. Net workers compensation premiums were substantially reduced because the city participates on what is known as a "retro-refund" basis whereby you are eligible to receive a premium rebate if your claims experience is good. If you have a bad year you risk incurring additional charges. Last year we had an excellent year and received a significant premium refund. Professional services line item was exceeded by over $7,000 which was utilized in the police chief position recruitment. The only other major variance occurred in the vehicle maintenance category whereby squad repairs were about 60% above budget estimates. . Fire Department expenses ran over at 115% basically due to the fact that the insurance premium payment which we receive from the State and simply pass on to the Fire department's relief association increased from $45,000 to almost $62,000. This $17,000 difference represented most of the $28,000 overage in 1997 but as indicated is offset on the revenue side. The remaining amount was attributed to volunteer compensation increasing from an anticipated $38,000 to $59,000 as response hours jumped from 5,873 hrs. in 1996 to 8,499 hrs. in 1997 due mainly to an increased response rate as well as level of alarm calls especially in the area of carbon monoxide alarms. Work has been undertaken with the Scott County dispatcher's office to better regulate these calls for servIce. BR0497.DOC c.!' -----r .... . Building Inspection Department totals were under projections due to the three month building official vacancy plus the fact that the professional service category typically used for outside plan inspections of large complex commercial projects was not expended. Also the department experienced very low vehicle maintenance expenses as less than 10% of their $15,000 maintenance appropriation was used. . Civil Defense expenses were lower because of limited siren repairs caused by fewer lightning strikes than in a typical year. . Public Safety total budget performance was a favorable 97% in view of the fact that it accounts for the major public service category and nearly 35% of the city's entire general operating budget. Public WorkS . Engineering expenses lagged at 86% of budget primarily due to pOSItIon vacancies relating to the assistant city engineer and engineering tech 3 positions which were open for an extended period of time. . Street Department costs were exceeded for the most part in two line items; $11,000 more in street patching was spent than originally planned for and electric utilities for street lighting escalated by more than 14% ($8,960) which was the result of a significant number of street lights coming on line due to county road and new subdivision projects. . Public Works totals came in somewhat under budget estimates at 94% mainly due to the underunning of personnel expenses within the Engineering Department. Culture-Recreation . Recreation program expenditures represent a budget performance of 103% that is higher as a result of increased recreation program participation especially in the dance program area which has been extremely popular and has produced higher revenues as well. . Park Department expenditures came in right on budget at 100%. . Library year-end results were favorable due to the fact that very minor repair and maintenance costs were incurred during the year. . Culture-Recreation overall total of 101 % was consistent with budget estimates. Economic Develooment . Economic Development expenditure activity of 101% was consistent with budget estimates. Contin{!ent Reserve . Contingency expenditures $152,000 were associated with four expenditure appropriations by the City Council during 1997; the civil defense siren installed along Northwood Road & Center Street in cooperation with Spring Lake Township, labor settlement backpay for the past three years for the Teamsters professional manager's bargaining unit, entry monuments, and cable T.V. equipment for the council chambers. Exnenditure Summarv: Total unaudited 1997 General Operating Budget expenditures are projected to be $6,043,413 when including outstanding encumbrances. This amount represents 98.2% of the City of Prior Lake $6,153,718 Operating Budget. These totals compare with actual budgetary performance of98%, 95% and 98% for the preceding years of 1996, 1995 and 1994. BR0497.DOC Revenues: . Current property tax collections resulted in a 98% collection rate which is representative with previous years on average. When adding in delinquent receipts of past years the City realized over 99% of its 1997 tax levy. . License & Permits revenue is down for the year at 86% of budget. This occurred because building permit revenue was 22% lower than projected. . Intergovernmental revenue was up at 103% because the City applied and received state categorical aid for (1) prior year snow removal costs, (2) milfoil control and the (3) police liaison program. . Charges for Services was near expectations at 101% of revenue realized. Although building plan check fees was significantly down, several categories such as the cable franchise fee, tower antenna rental fees, zoning and subdivision fees exceeded projections for the year. . Fine revenue averaged almost $6550 or $1500 more per month than projected. . Development revenue in excess of $143,000 was earned for the year which was 4 times greater than the entire $35,000 budgeted for the year and accounted for the large increase in Miscellaneous Revenues. This revenue source is highly cyclical which is evident as the City received no development contract dollars in the last quarter. . Other Financing Sources primarily consisted of the $175,000 enterprise fund contribution transfer and property sales which generated an additional $17,000. The majority of the latter revenue came in the form of $12,400 in tax forfeiture proceeds of land sales in Prior Lake that was conducted by Scott County. Revenue Summarv: Total 1997 General Operating Budget revenues are projected to be $6,252,753. This amount represents 101.6% of the City of Prior Lake's $6,153,718 General Operating Budget. These totals compare with actual budgetary performance of 105%, 105% and 99% respectively for the preceding years of 1996, 1995 and 1994. 4TH QUARTER BUDGET RECAP: Overall, the 1997 budgetary financial performance was very good as the City's General Fund balance will have increased by approximately $209,000 as the results of revenues exceeding expenditures. As soon as the City's 1997 financial audit is completed in May, Staff will report the actual fund balance increase. To meet the City Council's 30% directive for cash flow and reserve purposes, the required General Fund balance would have to approach $2,049,000. At this point in time the City's unaudited year-end General Fund balance is $1,799,000 which is $250,000 short of this position and represents a 26% cash flow reserve. Although the City achieved an operating surplus, it was not enough to offset the $450,000 transfer approved earlier in the year by the Council to provide a portion of the funding for the Revolving Equipment Fund. BR0497.DOC