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Home My WebLink About4G - 1996 Fourth Quarter Budget Report STAFF AGENDA REPORT AGENDA #: PREPARED BY: SUBJECT: 4G RALPH TESCHNER, FINANCE DIRECTOR CONSIDER APPROVAL OF PRELIMINARY 1996 4TH QUARTER BUDGET REPORT AND OVERVIEW MARCH 17, 1997 DATE: 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 4th 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. Tl}e "Budget Report Overview" is intended to serve as narrative rpport to the Quarterly Budget Report and enhance your (understanding of performance results. Please feel free to contact me C::::ion 204 for more information. Attachment 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER H:\BUDGE1iBR.DOC 1996 4th Quarter Budget Report (preliminary) Budget Amount Expended Percent General Government 1,209,390.00 1,135,963.00 94% Mayor & Council 25,110.00 21,543.00 86% Ordinance 14,675.00 12,639.00 86% City Manager 224,190.00 234,092.00 104% Boards & Commissions 5,395.00 4,021.00 75% Elections 4,000.00 3,427.00 86% Director of Finance 86,710.00 86,936.00 100% Accounting 57,965.00 57,714.00 100% Internal Auditing 9,700.00 9,725.00 100% Assessing 32,410.00 31,812.00 98% Law 186,800.00 229,510.00 123% Personnel 62,470.00 69,926.00 112% Planning & Zoning 236,320.00 182,027.00 77% Data Processing 71,825.00 62,873.00 88% Buildings & Plant 191,820.00 129,718.00 68% Public Safety 1,961,540.00 1,947,831.00 99% Police 1,491,270.00 1,446,369.00 97% Fire & Rescue 184,560.00 212,606.00 115% Building Inspection 268,430.00 275,480.00 103% Civil Defense 6,050.00 2,419.00 40% Animal Control 11,230.00 10,957.00 98% Public Works 733,900.00 667,090.00 91% Engineering 431,780.00 371,541.00 86% Street 302,120.00 295,549.00 98% Culture-Recreation 861,800.00 889,419.00 103% Recreation 229,150.00 228,644.00 100% Parks 619,385.00 651,101.00 105% Libraries 13,265.00 9,674.00 73% Economic Development 51,560.00 46,000.00 89% Debt Service 488,815.00 488,622.00 100% Contingent Reserve 140,000.00 110,911.00 79% Revenues 5,447,005.00 5,712,762.00 105% General Property Taxes 2,728,210.00 2,713,397.00 99% Licenses & Permits 371,710.00 506,258.00 136% Intergovernmental Revenue 1,447,655.00 1,556,022.00 107% Charges for Services 560,230.00 515,735.00 92% Fines & Forfeits 60,000.00 61,119.00 102% Miscellaneous Revenue 103,200.00 180,977.00 175% Other Financing Sources 176,000.00 179,254.00 102% Total Budget Expenditures 5,447,005.00 5,285,836.00 97% Total Budget Revenues 5,447,005.00 5,712,762.00 105% BR04XLS 4: 18 PM'lJ27/97 BUDGET REPORT OVERVIEW (Preliminary 1996 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 under because legal publications costs were less than expected. . City Manager department costs were up marginally because of an increase in professional services expenditures of $24,000 attributed to organizational development. . City Attorney costs were significantly above projections within the general service legal category due to approximately $41,000 of incurred billings attributed to labor contract negotiations, a monthly retainer which was higher than was paid in previous years plus litigation activity has increased. Offsetting these increased costs are lower prosecution costs (62%) due to positive restitution cost recovery. . Personnel expenditures were up due to substantial employment hiring costs Le., advertisements, testing etc. In addition, professional services utilization attributed to labor relations ended almost triple the original allocation. . Planning department budget was underexpended by nearly 23%. This occurred primarily due to position vacancies and the fact that their professional services category was not utilized as originally planned which accounted for nearly 85% of their remaining balance. . Data Processing totals will be close to budget because an additional $7750 of outstanding capital purchases are encumbered. . Total Buildings & Plant costs were favorable this past year mainly due to the fact that the City received an exceptional dividend insurance premium return from the League of Minnesota Cities Insurance Trust Fund in excess of $42,000. . Remaining categories are in conformance with budget estimates with overall General Government budget performance of 94% which is somewhat lower than typical year end results. Public Safety . Police Department outcome at 4th quarter was at 97%. The department was very near budget in virtually all expenditure categories with the only three exceptions in the areas of workers comp insurance, training and MDT communication access. 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. Net training costs were down because a large percentage was reimbursed from the state of Minnesota. The Police department also did not expend their computer communications account for their mobile data tenninallinkup because Scott County had not yet completed the technical aspects of this project. These three categories accounted for $35,411 or nearly 80% of the $44,901 department year-end balance. . 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 jumped from $40,000 to over 61,000. This $21,000 difference represented most of the $28,000 overage in 1996 but as indicated is offset on the revenue side. The remaining amount was attributed to volunteer compensation increasing from an anticipated $30,100 to almost $38,500 due to calls associated with carbon monoxide alarms. BR0496.DOC .'~: . Public Safety total budget performance was a very favorable 99% in view of the fact that it accounts for the major public service category within the City's general operating budget. Public Works . Engineering outcome of 86% underran primarily due to the fact that the public works director position remained unfilled for a large portion of the year and only 30% of the professional service line item category was expended which is normally reserved for consulting engineering fees that are needed for special projects. . Street Department expenses were close to budget at 98%. . Public Works total of 91 % ended up somewhat under budget estimates due to the above referenced factors. Culture-Recreation . Recreation program expenditures came in virtually exactly at 100%. . Park Department expenditures exceeded budget projections by 5% because fairly significant expenditures were incurred this sununer, across the board, in upgrading and maintaining equipment and community/neighborhood park structures. . Library costs were only 73% of budget as repair and maintenance costs were fairly minimal during the year with the exception of the roofmg allocation from Contingency. . Culture-Recreation overall total of 103% was fairly consistent with budget estimates. Economic Development . Unexpended EDC promotional resources of $3500 and $1000 within the travel and conference categories resulted in the Economic Development department total coming in somewhat low at 89% of budget. Contingent Reserve . A significant portion (almost 80%) of the Contingent reserve account was utilized this year due to the following needs i.e., Lakefront Master Plan, squad car accident, ice and wind storms, city hall and library roof repairs, smoke house purchase and increased building inspection service allocations. Exvenditure Summary: Total 1996 General Operating Budget expenditures are projected to be approximately $5,316,000 when including outstanding encumbrances. This amount represents 97.6% of the City of Prior Lake $5,447,005 Operating Budget. These totals compare with actual budgetary performance of95%, 98% and 101% for the preceding years of 1995, 1994 and 1993. 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 1996 tax levy. . License and permit revenue exceeded projection by 36% fueled by building permit revenue of nearly $368,000 versus budget estimate of $284,000. Building permit activity in terms of dollars was 30% above expectations while the actual number (238) of single family starts was slightly less than the budget number of 250. While this number varied only slightly, the revenue difference was accounted for by greater commercial, industrial and institutional activity and higher valued homes on average. . Intergovernmental revenue was higher (107%) primarily due to three aspects of intergovernmental aid. The City negotiated a SMDC flat contract service rate of $240,000 BR0496.DOC versus the $200,000 budget estimate based upon the previous year's collection that was call based. In addition 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 was a direct pass-thru to the Fire Department to support their volunteer pension program so no actual gain was realized. Also, state police aid was up almost $27,000 above previous years levels. These three areas represented a cumulative excess of nearly $88,000. . Charges for Services was near expectations at 92% of revenue realized. This was slightly under mainly as a result of deferring a portion of the City's project administration fee until 1998 and fIre and rescue revenue was down by $27,000. . Fine revenue of 102% was slightly above our budget estimate of $5000 per month. . Development revenue in excess of $80,000 was more than double the budget fIgure of $35,000. . Other Financing Sources consisted of the $175,000 enterprise fund contribution transfer and property sales which generated an additional $4,000 of revenue. Revenue Summary: Total 1996 General Operating Budget revenue is projected to be approximately $5,713,000. This amount represents 104.9% of the City of Prior Lake's $5,447,005 Operating Budget. these totals compare with actual budgetary performance of 105%, 99% and 111 % respectively for the preceding years of 1995, 1994 and 1993. 4TH QUARTER BUDGET RECAP: Overall, the 1996 budgetary fInancial performance was very good as the City's General Fund balance will have increased by $396,000 as the results of revenues exceeding expenditures. As soon as the City's 1996 financial audit is completed in May, Staff will report the actual fund balance increase along with recommended alternatives for reserve uses. Recognizing that we would need to retain approximately $213,000 within the General Fund balance to meet the City Council's 30% directive for cash flow and reserve purposes, we would then have available an estimated $183.000 for future designation. *[ 4th Quarter Budget Report represents expenditures and revenues to date and do not include outstanding appropriations and receipts.] BR0496.DOC