PFM 1st Quarter 2014 Report

 

 

 

 

 

 

 

Public Financial Management, Inc.
PFM Asset Management LLC
PFM Advisors

Two Logan Square
Suite 1600

18th & Arch Streets
Philadelphia, PA 19103-2770

215 567-6100

215 567-4180 fax

www.pfm.com


Q1 2014 Financial Results

 

This report summarizes preliminary financial results for the period January 1, 2014 through March 31, 2014 based on trial balance financial data provided by the City on May 14, 2014.

 

Overview

 

The City collected 17.2 percent of its budgeted revenues and spent 16.4 percent of its budgeted expenditures through March 2014. While revenues exceeded expenditures by $699,000 through March, expenditures are usually low in the first quarter since the City pays little of its debt service and none of its pension contribution during the first quarter. The table below compares revenues and expenditures through March 2014 with the budget target.

 

Budget to Actual Comparison

 

 

2014 Q1

2014 Budget

% Spent/Collected

Revenues

14,543,665

84,375,519

17.2%

Expenditures

13,844,228

84,360,519

16.4%

Difference

699,437

15,000

N/A

 

On the revenue side, the City collected $762,000 (or 5.5 percent) more through March 2014 than through the same period in 2013. The increase is mostly because the City collected more revenue from its real estate and earned income taxes than a year ago through this period, plus the City has more grant revenue with the receipt of the SAFER grant.1 Revenues from the business privilege tax, local services tax and admissions fee trailed last year’s pace through March.

 

On the expenditure side, the City spent $13.8 million through March 2014, $806,000 (or 6.2 percent) more than through March 2013. The spending increase was attributable to higher salary spending in Public Works with six equipment operator positions shifted from the Recycling Fund to the General Fund in the 2014 budget. The City also had more capital spending on street paving and IT hardware, which is incorporated in the operating budget.

 

 

2014 Q1

2014

Budget

% Spent/ Collected

2013 Q1

Difference ($)

Difference (%)

Revenues

14,543,665

84,375,519

17.2%

13,782,110

761,555

5.5%

Expenditures

13,844,228

84,360,519

16.4%

13,037,949

806,278

6.2%

Difference

699,437

15,000

N/A

744,160

(44,723)

N/A

 

 

 

1 The City started receiving the SAFER grant revenue after March last year. So there was no SAFER grant revenue in the Q1 2013 results.


REVENUES

 

The City had $14.5 million in General Fund revenues through March 2014. The table below compares the City’s revenue performance through March 2014 to this year’s budget and to last year through March.

 

 

2014 Q1

2014

Budget

%

Collected

2013 Q1

Difference ($)

Difference (%)

Real Estate Taxes

2,471,098

21,083,297

11.7%

2,201,776

269,322

12.2%

Act 511 Taxes

5,313,659

24,990,795

21.3%

5,041,627

272,031

5.4%

Licenses, Permits, Fine

1,292,991

5,887,796

22.0%

1,300,438

(7,448)

-0.6%

Intergovernmental

1,402,252

10,681,789

13.1%

950,725

451,527

47.5%

Charges for Services

927,859

6,247,771

14.9%

997,715

(69,856)

-7.0%

Interest and Rent

91,415

1,365,000

6.7%

184,339

(92,924)

-50.4%

Other

1,001,891

4,718,593

21.2%

1,112,988

(111,097)

-10.0%

Transfers in

2,042,500

9,400,478

21.7%

1,992,500

50,000

2.5%

TOTAL REVENUES

14,543,665

84,375,519

17.2%

13,782,110

761,555

5.5%

 

Real Estate Taxes

 

Real estate taxes represent about a quarter of all General Fund revenues.  The City’s real estate tax rate remained the same in 2014 after it increased by 9 percent in 2013 to 15.689 mills.

 

 

2014 Q1

2014

Budget

% Collected

2013 Q1

Difference ($)

Difference (%)

Current Year

2,400,223

19,783,297

12.1%

1,826,201

574,022

31.4%

Prior Years

88,200

1,300,000

6.8%

351,491

(263,291)

-74.9%

Penalties and Interest

30,685

300,000

10.2%

60,608

(29,923)

-49.4%

Discount for Early Payment

(48,011)

(300,000)

16.0%

(36,524)

(11,486)

31.4%

Property Tax Subtotal

2,471,098

21,083,297

11.7%

2,201,776

269,322

12.2%

 

Through March 2014, the City collected 31.4 percent more in current year real estate tax than a year ago and approximately the same amount as in Q1 2012. The table below compares current and prior year property tax revenues collected through the first quarters of the last three years.

 

 

 

 

2012 Q1

 

2013 Q1

 

2014 Q1

% Change from 2012 - 2014

Current Year

2,329,023

1,826,201

2,400,223

3.1%

Prior Years

40,186

351,491

88,200

119.5%


 

 

 

2012 Q1

 

2013 Q1

 

2014 Q1

% Change from 2012 - 2014

Total

2,369,209

2,177,692

2,488,424

5.0%

 

The majority of the real estate revenues arrive in the second quarter so it is too early to draw meaningful conclusions about how 2014 year-end receipts will compare to last year.

 

Act 511 Taxes

 

Act 511 taxes are the City’s largest revenue category. The earned income tax on residents and non-residents is the City’s second largest source of budgeted revenue after the property tax. The City collected 21.3 percent of its budgeted Act 511 Taxes through March 2014.

 

 

2014 Q1

2014

Budget

%

Collected

2013 Q1

Difference ($)

Difference (%)

Earned Income Tax

4,588,509

19,602,820

23.4%

4,071,745

516,763

12.7%

Business Privilege Tax

122,449

2,100,000

5.8%

335,722

(213,273)

-63.5%

Real Estate Transfer Tax

415,388

1,982,975

20.9%

364,901

50,487

13.8%

Local Services Tax

186,492

1,100,000

17.0%

265,207

(78,714)

-29.7%

Per Capita Tax

820

205,000

0.4%

4,052

(3,231)

-79.8%

Subtotal

5,313,659

24,990,795

21.3%

5,041,627

272,031

5.4%

 

The earned income tax is by far the largest of these taxes, making up 86.4 percent of first quarter Act 511 tax revenue. Berks EIT, Incorporated handles EIT collections for the City and all other governments in Berks County under the terms of Act 32 of 2010.

 

Earned income tax revenues outpaced last year’s level through the first quarter, with the City collecting $517,000 (or 12.7 percent) more. This was expected because of the EIT rate increase effective January 1, 2013. Most EIT revenue collected during the first quarter of any year comes from the prior year. So most of the EIT revenue collected in Q1 2013 came from 2012 while most of the revenue collected in Q1 2014 came from 2013. The tax rate on residents and non- residents was 0.2 percent higher in 2013 than 2012 so prior year revenues were also higher.

 

The City collected $122,000 (or 5.8 percent) of its business privilege tax budget target through March 2014 compared to $336,000 through the same period last year. The majority of business privilege tax revenues arrive in the second quarter so it is too early to draw meaningful conclusions about how 2014 year-end receipts will compare to last year.


Licenses, Permits & Fees

 

This category includes rental housing permit fees, cable franchise fees, traffic and court fines and business privilege licenses. The City collected 22.0 percent of budgeted revenues in this category, close to the amount collected in Q1 2013.

 

One of the largest items in this category is the City’s charges for rental housing permits.2 The City collected 37.6 percent of its current year budget target and 15.6 percent of its prior year target.

 

Rental Housing Permit Revenues

 

 

 

2014 Q1

 

2014 Budget

%

Collected

Current Year

334,265

890,000

37.6%

Prior Years

70,288

450,000

15.6%

Housing/Rental Permit Total

404,554

1,340,000

30.2%

 

The City received $53,000 from quality of life fines through March 2014 versus $109,000 last year and no revenue from new construction permits versus $30,000 last year.

 

Other Licenses, Permits and Fees

 

 

2014 Q1

2014

Budget

%

Collected

2013 Q1

Difference ($)

Difference (%)

District court summary offenses

162,408

850,000

19.1%

188,264

(25,856)

-13.7%

Franchise fees

0

725,000

0.0%

0

0

N/A

New construction permits

0

90,000

0.0%

30,174

(30,174)

-100.0%

Traffic fines motor codes

0

325,000

0.0%

0

0

N/A

Business privilege Licenses

182,757

350,000

52.2%

187,083

(4,326)

-2.3%

Quality of life fines

53,276

390,000

13.7%

108,873

(55,597)

-51.1%

Other

489,997

1,817,796

27.0%

434,455

55,542

12.8%

Subtotal

888,437

4,547,796

19.5%

948,848

(60,412)

-6.4%

 

Intergovernmental Revenues

 

The City received 13.1 percent of total budgeted intergovernmental revenues.  The largest item in this category is the Commonwealth pension aid, which arrives in the second half of the year.

 

 

 

2 Revenue from payments for rental housing inspections is tracked separately in the Charges for Service category.


 

 

2014 Q1

2014

Budget

%

Collected

2013 Q1

Difference ($)

Difference (%)

Pension-State Contributions

0

3,150,000

0.0%

0

0

N/A

Meter Surcharge

425,000

1,700,000

25.0%

283,333

141,667

50.0%

RAWA Supplement

375,000

1,500,000

25.0%

375,000

0

0.0%

Parking Authority Supplement

135,000

810,000

16.7%

135,000

0

0.0%

Grants and Gifts

378,431

1,852,145

20.4%

51,317

327,115

637.4%

Reading Public Library

0

767,644

0.0%

0

0

N/A

Other

88,821

902,000

9.8%

106,075

(17,254)

-16.3%

Subtotal

1,402,252

10,681,789

13.1%

950,725

451,527

47.5%

 

The City received $327,000 more in grant and gift revenue than a year ago because of the timing of the SAFER grant. Last year the City received a grant from the Staffing for Adequate Fire and Emergency Response (SAFER) program administered by the US Department of Homeland Security. The City received $963,000 in SAFER grant revenues last year, most of which arrived in the second half of the year. The City will receive another $1.3 million this year. The grant reimburses the City for 21 firefighter positions added through the grant.

 

Charges for Services

 

The City collected 14.9 percent of budgeted revenues from charges for services, which was

$70,000 (or 7.0 percent) less than a year ago. The largest item in this category is the City’s charges for EMS service where the City has collected $23,000 (or 5.5 percent) more than a year ago.

 

Revenue that the Police Department generates by providing additional coverage to specific entities at a reimbursable rate is partially reported in the Police Service/Copy Service line. The City also records some revenue received to offset reimbursed overtime activities under grants and gifts in the Intergovernmental Revenue category.

 

Admissions fee receipts trails last year’s pace, with the City receiving $75,000 (or 70.6 percent) less than through the same period last year. The table below shows other large items in this category.

 

Service Charge Revenue

 

 

2014 Q1

2014

Budget

%

Collected

2013 Q1

Difference ($)

Difference (%)

EMS User Fees

435,064

3,536,638

12.3%

412,247

22,817

5.5%

Housing Inspection

196,326

805,000

24.4%

197,098

(772)

-0.4%

Kenhorst Police Contract

107,785

431,139

25.0%

104,645

3,139

3.0%

Admissions Fee/Tax

31,280

425,000

7.4%

106,461

(75,180)

-70.6%


 

 

2014 Q1

2014

Budget

%

Collected

2013 Q1

Difference ($)

Difference (%)

Police Service/Copy Service

44,877

275,000

16.3%

52,280

(7,403)

-14.2%

Zoning Housing Appeals

24,120

160,850

15.0%

33,400

(9,280)

-27.8%

Other

88,408

614,144

14.4%

91,584

(3,176)

-3.5%

Subtotal

927,859

6,247,771

14.9%

997,715

(69,856)

-7.0%

 

Interest and rent

 

The City reports $93,000 less in interest and rental revenues than a year ago through March because of an accounting adjustment. The City changed how it records the debt repayment from the Greater Berks Development Fund and that adjustment appears as a “negative revenue” in the trial balance report.

 

Interest and Rent Revenues

 

 

2014 Q1

2014

Budget

% Collected

2013 Q1

Difference ($)

Difference (%)

Rental - Parking Authority

166,666

1,000,000

16.7%

166,666

0

0.00%

Rental on Stadium

0

300,000

0.0%

0

0

N/A

Repayment of Debt to City

(95,333)

0

N/A

0

(95,333)

N/A

Other

20,082

65,000

30.9%

17,673

2,409

13.63%

Interest & Rental Subtotal

91,415

1,365,000

6.7%

184,339

(92,924)

-50.41%

 

Other Revenues

 

The City collected 21.2 percent of the total budget for all other revenues category, which was

$111,000 (or 10.0 percent) less than last year.

 

The largest item in this category is City employees’ contributions to the cost of health insurance3 which dropped by 20.9 percent compared to last year because of a provision in the City’s Recovery Plan. According to the Recovery Plan, the City’s share of total premiums increases by five percent each year, even if the premiums themselves stay flat or decline as was the case this year.4   If the total premiums decline, and the City is paying a higher share of the smaller amount,

 

3 The expenditure section of this report discusses the City’s expenses related to employee health insurance. Please note that this revenue line does not include the expenses that the City employees pay to medical care providers at the time of receiving service (e.g. office or prescription drug copayments, deductibles).

4 If the total premium costs increase by more than five percent, than the City employees would make higher contributions to cover the difference. Employees also could reduce their contributions by selecting a different kind of coverage (i.e. moving from Preferred Plus to Preferred).


then the employee’s share drops. So employees with single coverage under the Preferred Plus option are contributing 30 percent less in 2014 than in 2013 and employees with family coverage under the Preferred option are contributing 29 percent less.

 

Other Revenues

 

 

2014 Q1

2014

Budget

% Collected

2013 Q1

Difference ($)

Difference (%)

Employee Insurance Contribution

305,879

1,500,000

20.4%

386,936

(81,057)

-20.9%

Indirect Cost Reimb - Sewer

290,074

1,161,432

25.0%

266,611

23,463

8.8%

CDBG Revenue to Fund Codes

0

500,000

0.0%

0

0

N/A

Heart & Lung Reimbursement

67,047

290,000

23.1%

88,049

(21,002)

-23.9%

Indirect Cost Reimb - CD

0

189,996

0.0%

70,624

(70,624)

-100.0%

Rdg. Housing Auth - Reimb.

47,884

200,000

23.9%

15,755

32,129

203.9%

Indirect Cost Reimb- Recycling

110,586

250,216

44.2%

63,724

46,862

73.5%

Indirect Cost Reimb- Water

95,671

0

N/A

62,500

33,171

53.1%

Direct Cost Reimb. - Trades

0

170,000

0.0%

13,158

(13,158)

-100.0%

Other

84,751

456,949

18.5%

145,632

(60,881)

-41.8%

Other Revenues Subtotal

1,001,891

4,718,593

21.2%

1,112,988

(111,097)

-10.0%

 

Interfund revenues

 

The City transfers $5.2 million from the Water Fund to the General Fund as an annual lease payment from the Reading Area Water Authority (RAWA). The lease agreement between the City and RAWA sets the transfer amount.The City also transfers $3.0 million per year from the Wastewater Treatment Plant Fund to the General Fund each year as restricted by the November 2005 federal consent decree. Both transfers are made on a monthly basis throughout the year. The City also budgeted a $1.2 million transfer from its fund balance this year to fund capital projects, like paving and information technology upgrades.

 

 

2014 Q1

2014

Budget

%

Collected

2013 Q1

2013 Q4

%

Collected

From RAWA

1,292,500

5,170,000

25.0%

1,242,500

4,970,000

25.0%

Transfer from Sewer Fund

750,000

3,000,000

25.0%

750,000

3,000,000

25.0%

Transfer from Fund Balance

0

1,230,478

0.0%

0

0

0.0%

Subtotal

2,042,500

9,400,478

21.7%

1,992,500

7,970,000

25.0%

 

5 The lease agreement also sets RAWA’s supplemental payment to the General Fund, which is tracked in intergovernmental revenues as “RAWA supplement.”


 

EXPENDITURES

 

The City spent $13.8 million in its General Fund through March 2014, which was 16.4 percent of the $84.4 million budget. The City spent $806,000 (or 6.2 percent) more than a year ago with most of the difference in salaries and operating costs as explained below.

 

 

2014 Q1

2014

Budget

%

Spent

2013 Q1

Difference                   Difference ($)                    (%)

Salaries, wages & holiday pay

7,167,045

29,236,011

24.5%

6,833,952

333,093

4.9%

Overtime

662,845

2,497,300

26.5%

718,892

(56,047)

-7.8%

Pensions

0

9,957,024

0.0%

0

0

0.0%

Fringe benefits

2,272,451

10,946,924

20.8%

2,058,081

214,370

10.4%

Other personnel

450,955

1,623,894

27.8%

437,911

13,045

3.0%

Debt service

578,740

13,144,084

4.4%

473,481

105,259

22.2%

Operating costs

1,879,970

11,608,877

16.2%

1,650,802

229,168

13.9%

Other expenses

196,797

671,310

29.3%

204,432

(7,636)

-3.7%

Contingencies

0

2,133,400

0.0%

1,401

(1,401)

-100.0%

Interfund transfer expenses

635,424

2,541,695

25.0%

658,996

(23,572)

-3.6%

Total Expenditures

13,844,228

84,360,519

16.4%

13,037,949

806,278

6.2%

 

Personnel

 

The majority of the Personnel budget is for the “regular” pay of City employees: their salaries, temporary wages, and holiday pay. These categories make up 87.6 percent of the 2014 Personnel budget. Overtime pay represents another 7.5 percent and the remaining 4.9 percent includes longevity, uniform/clothing allowance and any settlements.

 

The table below shows spending for salaries, temporary wages, and holiday pay by department. All departments are close to the 25 percent spending level expected through the first quarter of the year. The Fire Department spent $209,000 more than last year because of the positions added through the SAFER grant. Public Works spent $67,000 (or 18.5 percent) more than last year because of increased expenses in the Highways division. The City shifted the salary expenses for six equipment operators from the Recycling Fund to the General Fund.


Salaries, Temporary Wages and Holiday Pay by Department

 

 

2014 Q1

2014

Budget

% Spent

2013 Q1

Difference         Difference ($)                  (%)

Police

3,177,952

12,940,169

24.6%

3,190,717

(12,765)

-0.4%

Fire

2,193,299

8,850,984

24.8%

1,983,857

209,442

10.6%

Public Works

427,255

1,803,899

23.7%

360,676

66,578

18.5%

Admin. Services

469,319

1,651,797

25.2%

402,148

67,170

16.7%

Comm Development

492,732

2,139,443

23.0%

501,540

(8,809)

-1.8%

Other

406,489

1,849,719

24.7%

395,013

11,475

2.9%

Subtotal

7,167,045

29,236,011

24.5%

6,833,952

333,093

4.9%

 

Overtime

 

The City’s overtime expenditures through March 2014 were $56,000 (or 7.8 percent) less than through March 2013.

 

 

2014 Q1

2014

Budget

%

Spent

2013 Q1

Difference ($)

Difference (%)

Police

388,918

1,814,500

21.4%

479,269

(90,351)

-18.9%

Fire

205,168

641,300

32.0%

216,537

(11,368)

-5.3%

Public Works

64,226

39,500

162.6%

20,840

43,386

208.2%

Other

4,534

2,000

226.7%

2,247

2,287

101.8%

Subtotal

662,845

2,497,300

26.5%

718,892

(56,047)

-7.8%

 

The Police Department spent $90,000 (or 18.9 percent) less than in Q1 2013. Last year police overtime spending finished at $1.9 million. As discussed in our September 2013 Police Overtime Analysis, the overtime expenditures are only part of the story. Some overtime expenditures are reimbursed for by private parties, other governmental entities, or grants. Accounting for the reimbursements tracked in the Police Service revenue line, the City had

$344,000 in unreimbursed police overtime expenditures through March, which was $83,000 (or

19.4 percent) less than through the same period in 2013.


Police Department Overtime including Reimbursements6

 

 

Budget

Q1 Actual

FY13 Overtime

1,479,063

479,269

FY13 Reimbursement

170,000

52,280

FY13 Unreimbursed

1,309,063

426,989

 

 

 

FY14 Overtime

1,814,500

388,918

FY14 Reimbursement

275,000

44,877

FY14 Unreimbursed

1,539,500

344,041

 

The Fire Department spent $11,000 (or 5.3 percent) less on overtime than through the same period in 2013. The City spent $1.1 million on fire overtime for all of last year.

 

Benefits

 

This category includes the City's annual required contributions to the employee pension plans and spending on different types of employee insurance coverage (e.g. medical, prescription, dental, vision, Medicare).

 

Pensions

 

Pennsylvania law requires the City to make an annual contribution to each of its three employee pension plans. The City's contributions, also known as the Minimum Municipal Obligations (MMOs), are calculated by an external actuary based on the pension plans' assets and liabilities, and accounting for the employees' contributions. The City uses Commonwealth pension aid and General Fund revenues to make the MMO payments.  The City's total contributions for 2014 are

$10.0 million, basically the same as in 2013. The City did not make the contributions until September last year and is expected to make the contributions in the second half of this year.

 

Pension

2014 Q1

2014

Budget

% Spent

2013

Q1

Difference ($)

Difference (%)

Police

-

6,289,708

0.0%

-

0

0.0%

Fire

-

2,291,508

0.0%

-

0

0.0%

Employees & Officers

-

1,375,808

0.0%

-

0

0.0%

Subtotal

-

9,957,024

0.0%

-

0

0.0%

 

Employee insurance (Fringe Benefits)

 

6 This does not include the overtime reimbursements that are recorded as grant and gift revenue.


 

The  City  spent  20.8  percent  of  its  fringe  benefit  budget  through  March  2014,  which  was

$214,000 (or 10.4 percent) more than through March 2013.

 

Fringe Benefit Expenditures by Department

 

Fringe Benefits

2014 Q1

2013

Budget

% Spent

2013 Q1

Difference        Difference ($)                 (%)

Admin. Services

124,403

626,849

19.8%

96,568

27,835

28.8%

Public Works

162,370

688,005

23.6%

98,045

64,325

65.6%

Police

1,195,323

5,427,595

22.0%

1,167,048

28,275

2.4%

Fire

579,604

2,981,355

19.4%

521,534

58,070

11.1%

Comm. Development

130,033

795,028

16.4%

100,454

29,579

29.4%

Other

80,718

428,092

18.9%

74,432

6,286

8.4%

Subtotal

2,272,451

10,946,924

20.8%

2,058,081

214,370

10.4%

 

Fringe benefit spending exceeded first quarter levels for all departments in 2013 and all but two departments in 2012. The table below shows first quarter fringe benefit spending for the last three years.

 

 

2012 Q1

2013 Q1

2014 Q1

Difference from 2012-2014 ($)

Difference from 2012 - 2014 (%)

Admin Services

124,565

96,568

124,403

(163)

-0.1%

Public Works

168,493

98,045

162,370

(6,123)

-3.6%

Police

1,093,917

1,167,048

1,195,323

101,406

9.3%

Fire

468,672

521,534

579,604

110,932

23.7%

Comm. Development

113,271

100,454

130,033

16,762

14.8%

Other

94,102

74,432

80,718

(13,383)

-14.2%

Total

2,063,019

2,058,081

2,272,451

209,432

10.2%

 

Because the City is self-insured, fringe benefit spending can vary throughout the year as claims are filed and processed. But we will monitor this trend closely.


Other personnel

 

The City spent another $451,000 on other personnel-related expenditures through March. Social security spending is higher because six positions shifted from the Recycling Fund to the General Fund as described earlier.

 

Other Personnel

2014 Q1

2014

Budget

%

Spent

2013 Q1

Difference       Difference ($)                 (%)

Premium Pay

118,368

337,083

35.1%

125,248

(6,880)

-5.5%

Social Security

246,850

1,045,650

23.6%

233,495

13,355

5.7%

Unemployment Comp

-

100,000

0.0%

-

0

N/A

Penny Fund

1,022

2,035

50.2%

1,318

(295)

-22.4%

Uniforms/Clothing Allowance

84,715

139,126

60.9%

77,850

6,865

8.8%

Subtotal

450,955

1,623,894

27.8%

437,911

13,045

3.0%

 

Debt Service

 

The City spent 4.4 percent of its debt service budget through March 2014. For most outstanding bonds, loans and notes, the City makes one payment in the second quarter (May or June) and a second payment in the fourth quarter (November or December).

 

 

2014 Q1

2014

Budget

%

Spent

2013 Q1

Difference       Difference ($)                 (%)

Debt Service

578,740

13,144,084

4.4%

473,481

105,259

22.2%

 

Operating Costs

 

Representing 13.8 percent of the total budget, this is the category for materials and services that the City government uses in its regular operations. It includes utilities, legal services, equipment, and building maintenance.

 

Operating Costs

 

Operating Costs

2014 Q1

2014

Budget

%

Spent

2013 Q1

Difference                   Difference ($)                     (%)

Contracted Services7

382,082

2,969,430

12.9%

459,267

(77,185)

-16.8%

Light & Power8

183,994

1,488,800

12.4%

88,647

95,347

107.6%

 

7 The City increased its contracted services budget target by $779,000 in the Traffic Engineering Division of Public Works in 2014 to repair three dams and the Pagoda walls.

8 Includes street lighting.


 

Operating Costs

2014 Q1

2014

Budget

%

Spent

2013 Q1

Difference                   Difference ($)                     (%)

Machinery and Equipment

81,466

1,160,575

7.0%

51,378

30,088

58.6%

Maintenance Agreements

329,729

774,050

42.6%

248,100

81,629

32.9%

Gas

115,459

610,000

18.9%

100,915

14,544

14.4%

Other Operating Cost

787,240

4,606,022

17.1%

702,496

84,744

12.1%

Subtotal

1,879,970

11,608,877

16.2%

1,650,802

229,168

13.9%

 

The City spent $77,000 (or 16.8 percent) less on contracted services through March compared to last year. The apparent reduction is because of a timing quirk in the City’s payment to the Recreation Commission. The City only made a quarter of the total payment by March 2014 versus paying half of the total through March 2013.

 

The $95,000 increase in light and power expense is related to street paving. In prior years the City used money in the separate Liquid Fuels Fund to cover most street lighting expenditures. This year the City will use the money in the Liquid Fuels Fund for street paving and cover the street lighting expenditures with General Fund money. So General Fund spending on this category of expenditures will be higher than in prior years.

 

The City also increased its budget target for machinery and equipment by $928,000 to replace basic IT infrastructure. So spending in that line will also be higher than in prior years.

 

Other expenses

 

The table below shows other expenses in the General Fund.

 

 

 

2014 Q1

        2014                   

%            

 

2013 Q1

   Difference    

Difference

     Budget              

Spent        

          ($)                  

(%)        

Contingencies

0

2,133,400

0.00%

1,401

(1,401)

-100.0%

Miscellaneous

196,797

671,310

29.3%

204,432

(7,636)

-3.7%

Interfund transfers

635,424

2,541,695

25.0%

658,996

(23,572)

-3.6%

 

Rather than budgeting revenues higher than expenditures and showing an anticipated year-end positive result, the City budgets contingencies that bring expenditures approximately equal to revenues. This year the City budgeted $2.1 million for contingencies, including $1.1 million for recycling.

 

The interfund transfer is a payment from the General Fund to the Self Insurance Fund for the actual cost of property, liability and workers compensation claims and associated administrative costs. This transfer increased by $94,000 this year and the spending through March reflects that increase.