PFM 1st Quarter 2015 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 2015 Financial Results

 

This report summarizes preliminary financial results for the period January 1, 2015 through March 31, 2015 based on trial balance financial data provided by the City on April 9, 2015.

 

Overview

 

The City collected 18.9 percent of its budgeted revenues and spent 15.5 percent of its budgeted expenditures through March 2015. While revenues exceeded expenditures by $3.1 million 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 2015 with the budget target.

 

Budget to Actual Comparison

 

2015 Q1

2015 Budget

%

Spent/Collected

Revenues

17,201,903

90,785,031

18.9%

Expenditures

14,057,680

90,785,031

15.5%

Difference

3,144,224

0

N/A

 

On the revenue side, the City collected $2.7 million (or 18.3 percent) more in first quarter revenue than a year ago. The increase is mostly because the Reading Area Water Authority (RAWA) increased its total contribution from $8.4 million in 20141 to $11.0 million2 in 2015. Through Q1 2015, RAWA already made a third ($3.7 million) of that contribution. While we cannot draw meaningful conclusions about year-end revenues based solely on the first quarter results, the City did have higher first quarter collections this year for real estate and Act 511 taxes (e.g. earned income, real estate transfer).

 

On the expenditure side, the City spent $14.1 million through March 2015, which was $213,000 (or 1.5 percent) more than a year ago. While first quarter spending on employee salaries and overtime was relatively even with 2014 levels, the City spent $513,000 (or 22.6 percent) more than a year ago on fringe benefits (mostly medical and prescription drug insurance coverage).

 

 

2015 Q1

2015

Budget

% Spent/ Collected

2014 Q1

Difference ($)

Difference (%)

Revenues

17,201,903

90,785,031

18.9%

14,543,665

2,658,239

18.3%

Expenditures

14,057,680

90,785,031

15.5%

13,844,228

213,452

1.5%

Difference

3,144,224

0

N/A

699,437

2,444,787

N/A

 

 

1 Includes $5.22 million in Water Bureau Transfer, $1.5 million in RAWA Act 47 Supplement and $1.7 million in meter surcharge revenue

2 Includes $9.2 million in Water Bureau Transfer and $1.8 million in meter surcharge


 

 

Eight Trends to Watch

 

Revenue

 

         The City’s property tax rate remained unchanged at 15.689 mills this year. Through March, current year revenues are up 5.5 percent, though much of the revenue will arrive during the second quarter.

 

         The City’s earned income tax revenues are outpacing last year’s collections, with the City collecting $166,000 (3.6 percent) more in prior year revenues through March.

 

         The City collected 20.5 percent (or $328,000) of its business privilege tax, which was $205,000 or more than twice the amount the City collected through March last year.

 

         The City collected $418,000 (or 13.9 percent) of the $3.0 million budgeted EMS user fees, which was slightly less than last year.

 

Expenditures

 

         Salary spending is generally on target with 24.6 percent of the total budget spent through March. The City reports spending $120,000 more on police salaries, wages and holiday pay than a year ago because police officers receive a two-percent wage increase this year according to their collective bargaining agreement.

 

         Through March, the City spent $71,000 more on police overtime and $79,000 less on fire overtime than a year ago. According to the information provided to PFM, non-reimbursed police overtime is $79,000 (or 23.0 percent) more than through March last year.

 

         The City reports spending 23.3 percent of its budget for employee health insurance (fringe benefits) through March. Reported expenditures were $513,000 (or 22.6 percent) higher than through the same period last year.

 

         The City spent $137,000 (or 35.8 percent) more on contracted services through March 2015 than through March 2014 due to spending related to dam and bridge maintenance.


REVENUES

 

The City had $17.2 million in General Fund revenues through March 2015. The table below compares the City’s first quarter revenue performance to this year’s budget and last year through March.

 

 

2015 Q1

2015

Budget

%

Collected

2014 Q1

Difference ($)

Difference (%)

Real Estate Taxes

2,743,034

21,487,933

12.8%

2,471,098

271,936

11.0%

Act 511 Taxes

5,978,026

25,480,992

23.5%

5,313,659

664,367

12.5%

Licenses, Permits, Fine

1,327,698

5,420,027

24.5%

1,292,991

34,707

2.7%

Intergovernmental

1,010,508

11,890,598

8.5%

1,402,252

(391,744)

-27.9%

Charges for Services

927,477

5,398,842

17.2%

927,859

(383)

0.0%

Interest and Rent

183,974

1,365,000

13.5%

91,415

92,559

101.3%

Other

964,520

5,041,639

19.1%

1,001,891

(37,371)

-3.7%

Transfers in

4,066,667

14,700,000

27.7%

2,042,500

2,024,167

99.1%

TOTAL REVENUES

17,201,903

90,785,031

18.9%

14,543,665

2,658,239

18.3%

 

Real Estate Taxes

 

The real estate tax represents about a quarter of all General Fund revenues and is the City’s second largest source of budgeted revenue after the earned income tax. The City’s real estate tax rate has been 15.689 mills since 2013.

 

 

2015 Q1

2015 Budget

% Collected

2014 Q1

Difference ($)

Difference (%)

Current Year

2,532,525

19,637,933

12.9%

2,400,223

132,301

5.5%

Prior Years

217,248

1,800,000

12.1%

88,200

129,048

146.3%

Penalties and Interest

43,912

375,000

11.7%

30,685

13,227

43.1%

Discount for Early Payment

(50,651)

(325,000)

15.6%

0

(50,651)

N/A

Property Tax Subtotal

2,743,034

21,487,933

12.8%

2,519,109

223,926

8.9%

 

Through March 2015, the City collected $2.5 million in current year revenues, 5.5 percent more than a year ago. 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

2015 Q1

% Change from 2012 - 2015

Current Year

2,329,023

1,826,201

2,400,223

2,532,525

8.7%

Prior Years

40,186

351,491

88,200

217,248

440.6%

Total

2,369,209

2,177,692

2,488,424

2,749,773

16.1%

Tax Rate

14.334

15.689

15.689

15.689

7.3%


The majority of the real estate revenues arrives in the second quarter so it is too early to draw meaningful conclusions about how 2015 year-end receipts will compare to last year.

 

Act 511 Taxes

 

Act 511 taxes are the City’s largest revenue category.   The City collected 23.5 percent of its budgeted Act 511 Taxes through March 2015.

 

 

2015 Q1

2015

Budget

%

Collected

2014 Q1

Difference ($)

Difference (%)

Earned Income Tax

4,754,779

20,565,992

23.1%

4,588,509

166,270

3.6%

Business Privilege Tax

327,614

1,600,000

20.5%

122,449

205,165

167.6%

Real Estate Transfer Tax

582,643

1,900,000

30.7%

415,388

167,255

40.3%

Local Services Tax

305,845

1,200,000

25.5%

186,492

119,353

64.0%

Per Capita Tax

7,145

215,000

3.3%

820

6,324

770.9%

Act 511 Taxes Subtotal

5,978,026

25,480,992

23.5%

5,313,659

664,367

12.5%

 

The earned income tax is by far the largest of these taxes, making up 79.5 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 $166,000 (or 3.6 percent) more. The City’s first quarter earned income tax revenues usually come from the prior year, so most of the EIT collected in 2014 Q1 came from 2013 while most of the 2015 Q1 revenues came from 2014.

 

 

2015 Q1

2015

Budget

%

Collected

2014 Q1

Difference ($)

Difference (%)

EIT Current Year

0

14,167,672

0.0%

0

0

N/A

EIT Prior Year

4,754,779

6,398,320

74.3%

4,588,509

166,270

3.6%

Total EIT

4,754,779

20,565,992

23.1%

4,588,509

166,270

3.6%

 

The City collected $328,000 (or 20.5 percent) of its business privilege tax budget target through March 2015, which is more than twice the amount the City collected through the same period last year. Because the business privilege tax is due in June, the majority of the current year tax will arrive in the second quarter. In 2014, 76 percent of the City’s business privilege tax arrived in the second quarter.

 

Other Act 511 taxes have also increased through Q1 2015. Real estate transfer tax revenues increased by $167,000 (or 40.3 percent).   Local services tax increased by $119,000 (or 64.0


percent) compared to the same period last year.  The increase is driven by increase in prior year local services taxes, which increased by $120,000 (or 65.0 percent) as shown in the table below.

 

First Quarter Local Services Tax, 2012 2015

 

 

2012 Q1

2013 Q1

2014 Q1

2015 Q1

Current LST

221,211

101,100

1,358

282

Prior LST

76,047

164,107

185,135

305,563

Total Local Services Tax

297,259

265,207

186,492

305,845

 

Licenses, Permits & Fees

 

This category includes rental housing permit fees, cable franchise fees, traffic and court fines and business privilege licenses. The City collected 24.5 percent of budgeted revenues in this category, $35,000 (or 2.7 percent) more than the amount collected in Q1 2014.

 

One of the largest items in this category is the City’s charges for rental housing permits.3 The City collected 52.8 percent of its current year budget target and 31.6 percent of its prior year target. It is not unusual for the City to collect a large portion of the current year revenue during the first quarter. Last year the City received almost half of its annual total for current year revenue during the first quarter.

 

Rental Housing Permit Revenues

 

 

 

2015 Q1

 

2015 Budget

                   %                  

            Collected           

Current Year

385,453

730,000

52.8%

Prior Years

52,666

166,735

31.6%

Housing/Rental Permit Total

438,118

896,735

48.9%

 

The City received $221,000 in district court summary offense revenue through March 2015,

$58,000 (or 35.8 percent) more than through March 2014. The reason for the increase is likely due to increase in traffic offenses in the first quarter. The decrease of $61,000 (or 12.5 percent) in other licenses, permits and fees is mostly due to a $99,000 (or 59.2 percent) decrease in street cuts revenue. The City received $168,000 when it first implemented the program in Q1 2014 versus the $69,000 collected this year.

 

 

 

 

 

 

 

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


Other Licenses, Permits and Fees

 

 

2015 Q1

2015

Budget

%

Collected

2014 Q1

Difference ($)

Difference (%)

District court summary offenses

220,575

900,000

24.5%

162,408

58,167

35.8%

Franchise fees

0

750,000

0.0%

0

0

N/A

New construction permits

285

20,000

1.4%

0

285

N/A

Traffic fines motor codes

0

340,000

0.0%

0

0

N/A

Business privilege licenses

189,563

300,000

63.2%

182,757

6,806

3.7%

Quality of life fines

50,217

242,489

20.7%

53,276

(3,059)

-5.7%

Other

428,941

1,970,803

21.8%

489,997

(61,056)

-12.5%

Subtotal

889,580

4,523,292

19.7%

888,437

1,143

0.1%

 

Intergovernmental Revenues

 

The City received 8.5 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.

 

Starting this year, the City has changed how it records some of the revenue related to its water system. In prior years, the City booked RAWA’s lease payment partially as a transfer from the Water Fund and partially as a supplemental payment from RAWA. Now the City is booking the entire lease payment in the transfer category. As result of this accounting change, the City will show $0 in the “RAWA Supplement” line and a higher amount in the water fund transfer line this year.

 

 

2015 Q1

2015

Budget

%

Collected

2014 Q1

Difference ($)

Difference (%)

Pension-State Contributions

0

3,200,000

0.0%

0

0

N/A

Meter Surcharge

591,667

1,775,000

33.3%

425,000

166,667

39.2%

RAWA Supplement

0

0

0.0%

375,000

(375,000)

-100.0%

RPA Supplement

135,000

3,878,558

3.5%

135,000

0

0.0%

Grants and Gifts

374

1,389,796

0.0%

378,431

(378,057)

-99.9%

Reading Public Library

171,618

767,644

22.4%

0

171,618

N/A

Other

111,850

879,600

12.7%

88,821

23,029

25.9%

Total

1,010,508

11,890,598

8.5%

1,402,252

(391,744)

-27.9%

 

The City received only $374 in grants and gifts because of the timing of the SAFER grant reimbursements. In 2013 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 in 2013, $1.2 million last year,


and is expected to receive another $848,000 this year. The grant reimburses the City for 21 firefighter positions added through the grant.

 

Charges for Services

 

The City collected 17.2 percent (or $927,000) of budgeted revenues from charges for services, which was the same amount collected as a year ago. The largest item in this category is the City’s charges for EMS service where the City collected $17,000 (or 4.0 percent) less than a year ago. The City decided to discontinue its non-emergency transport program effective June 30, 2015, as recommended by the Amended Recovery Plan (FD02). Revenue from that particular function is a small portion of the $3.0 million total EMS user fee revenue target. Discontinuing the service midyear will result in lower revenues and lower expenditures than budgeted for that function.

 

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.

 

Service Charge Revenue

 

 

2015 Q1

2015

Budget

%

Collected

2014 Q1

Difference ($)

Difference (%)

EMS User Fees

417,707

3,000,000

13.9%

435,064

(17,357)

-4.0%

Housing Inspection

162,774

830,655

19.6%

198,626

(35,852)

-18.0%

Kenhorst Police Contract

112,096

448,384

25.0%

107,785

4,311

4.0%

Admissions Fee/Tax

67,608

325,000

20.8%

31,280

36,328

116.1%

Police Service/Copy Service

36,864

225,000

16.4%

44,877

(8,013)

-17.9%

Police Reimb. - RSD

0

0

0.0%

0

0

N/A

Zoning Housing Appeals

30,025

127,609

23.5%

24,120

5,905

24.5%

Other

100,403

442,194

22.7%

86,108

14,295

16.6%

Total

927,477

5,398,842

17.2%

927,859

(383)

0.0%

 

Interest and rent

 

The City reports $93,000 more in interest and rental revenues than a year ago through March because of an accounting adjustment in 2014. The City changed how it recorded the debt repayment from the Greater Berks Development Fund and that adjustment appeared as a “negative revenue” in the trial balance report in 2014. Setting that aside, the first quarter revenues were basically even with last year.


Interest and Rent Revenues

 

 

2015 Q1

2015

Budget

% Collected

2014 Q1

Difference ($)

Difference (%)

Rental - Parking Authority

166,666

1,000,000

16.7%

166,666

0

0.0%

Rental on Stadium

0

300,000

0.0%

0

0

N/A

Rent Other Property Buildings

15,668

65,000

24.1%

20,147

(4,479)

-22.2%

Other

1,640

0

N/A

(95,398)

97,038

-101.7%

Interest & Rental Subtotal

183,974

1,365,000

13.5%

91,415

92,559

101.3%

 

Interfund revenues

 

Last year the City and RAWA amended the lease that sets the Authority’s annual payment to operate the water system. As described in the Amended Recovery Plan, the 2015 lease payment amount is expected to be $9.2 million. 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 were previously made on a monthly basis throughout the year. During the first quarter of 2015, the City transferred an additional month’s worth of revenue, creating the difference noted below. The City budgeted a transfer of $2.5 million as use of fund balance, of which $2.3 million is offset by contingencies, as detailed later in this report.

 

 

2015 Q1

2015

Budget

%

Collected

2014 Q1

Difference ($)

Difference (%)

From RAWA

3,066,667

9,200,000

33.3%

1,292,500

1,774,167

137.3%

Transfer from Sewer Fund

1,000,000

3,000,000

33.3%

750,000

250,000

33.3%

Transfer from Fund Balance

0

2,500,000

0.0%

0

0

N/A

Total

4,066,667

14,700,000

27.7%

2,042,500

2,024,167

99.1%

 

Other Revenues

 

The City collected 19.1 percent of the total budget for the remaining revenues that are grouped together here, which was $37,000 (or 3.7 percent) less than last year.

 

The largest item in this category is City employees’ contributions to the cost of health insurance4 which dropped by 3.8 percent compared to last year.  Employee premium contributions should

 

 

 

4 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).


be higher this year because of the increased cost of medical claims last year.5 The City budget anticipates that employee contributions will increase from $1.5 million budgeted in 2014 to $1.7 million budgeted in 2015.

 

The 2015 revenue budget does not include any indirect cost reimbursement to the General Fund from the Water fund. In prior years the City was able to reimburse the General Fund for a portion of the expenses incurred on behalf of the water fund. Since 2010 the City has shifted functions and employees to RAWA so the reimbursements will also decrease.

 

Other Revenues

 

 

2015 Q1

2015 Budget

% Collected

2014 Q1

Difference ($)

Difference (%)

Employee Insurance Contribution

294,294

1,700,000

17.3%

305,879

(11,585)

-3.8%

Indirect Cost Reimb - Sewer

367,782

1,042,954

35.3%

290,074

77,709

26.8%

CDBG Revenue to Fund Codes

0

555,000

0.0%

0

0

N/A

Heart & Lung Reimbursement

31,465

290,000

10.8%

67,047

(35,582)

-53.1%

Indirect Cost Reimb - CD

0

190,000

0.0%

0

0

N/A

Rdg. Housing Auth - Reimb.

51,159

225,000

22.7%

47,884

3,275

6.8%

Indirect Cost Reimb- Recycling

128,324

442,000

29.0%

110,586

17,738

16.0%

Indirect Cost Reimb- Water

0

0

N/A

95,671

(95,671)

-100.0%

Direct Cost Reimb. - Trades

0

170,000

0.0%

0

0

N/A

Other

91,496

426,685

21.4%

84,751

6,745

8.0%

Other Revenues Subtotal

964,520

5,041,639

19.1%

1,001,891

(37,371)

-3.7%

 

EXPENDITURES

 

The City spent $14.1 million in its General Fund through March 2015, which was 15.5 percent of the $90.8 million budget. The City spent $213,000 (or 1.5 percent) more than a year ago with most of the difference in fringe benefits and operating costs as explained below.

 

 

2015 Q1

2015

Budget

%

Spent

2014 Q1

Difference       Difference ($)                 (%)

Salaries, wages & holiday pay

7,254,360

29,453,190

24.6%

7,167,045

87,315

1.2%

Overtime

649,426

2,599,385

25.0%

662,845

(13,419)

-2.0%

Pensions

0

13,204,536

0.0%

0

0

0.0%

Fringe benefits

2,785,865

11,935,968

23.3%

2,272,451

513,414

22.6%

Other personnel

445,140

1,643,141

27.1%

450,955

(5,816)

-1.3%

Debt service

0

13,145,964

0.0%

578,740

(578,740)

-100.0%

 

5 There is a time lag between the point at which the City incurs medical claim costs and the point at which those claims are factored into the City’s premiums. The 2015 premium rates should incorporate the City’s medical claims experience for much of 2014.


 

 

2015 Q1

2015

Budget

%

Spent

2014 Q1

Difference       Difference ($)                 (%)

Operating costs

2,097,897

13,627,459

15.4%

1,879,970

217,927

11.6%

Other expenses

221,117

1,117,340

19.8%

196,797

24,320

12.4%

Contingencies

0

2,342,550

0.0%

0

0

0.0%

Interfund transfer expenses

603,875

1,715,498

35.2%

635,424

(31,549)

-5.0%

Total Expenditures

14,057,680

90,785,031

15.5%

13,844,228

213,452

1.5%

 

Personnel

 

The majority of the Personnel budget is for the “regular” pay of City employees: their salaries, holiday pay and wages for temporary employees. These categories make up 87.4 percent of the 2015 Personnel budget. Overtime pay represents another 7.7 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 with the exception of Administrative Services, which has vacant positions and had no base salary increase for many of its employees.

 

Salaries, Temporary Wages and Holiday Pay by Department

 

 

2015 Q1

2015

Budget

%

Spent

2014 Q1

Difference       Difference ($)                 (%)

Police

3,297,960

13,251,784

24.9%

3,177,952

120,008

3.8%

Fire

2,200,433

8,757,254

25.1%

2,193,299

7,133

0.3%

Public Works

444,051

1,804,917

24.6%

427,255

16,796

3.9%

Administration

425,953

1,962,484

21.7%

469,319

(43,366)

-9.2%

Community Dev

509,790

2,107,034

24.2%

492,732

17,058

3.5%

Other

376,173

1,569,717

24.0%

406,489

(30,315)

-7.5%

Total

7,254,360

29,453,190

24.6%

7,167,045

87,315

1.2%

 

Overtime

 

The City’s overtime expenditures through March 2015 were $13,000 (or 2.0 percent) less than through March 2014.

 

2015 Q1

2015

Budget

%

Spent

2014 Q1

Difference       Difference ($)                 (%)

Police

459,986

1,693,781

27.2%

388,918

71,068

18.3%

Fire

126,398

849,604

14.9%

205,168

(78,770)

-38.4%

Public Works

52,559

52,000

101.1%

64,226

(11,667)

-18.2%

Other

10,878

4,000

271.9%

4,534

6,344

139.9%

Total

649,821

2,599,385

25.0%

662,845

(13,025)

-2.0%


 

The Police Department spent $71,000 (or 18.3 percent) more on overtime than in Q1 2014. Last year police overtime spending finished at $1.8 million. Including salary spending and longevity, the Police Department spent $3.8 million on total cash compensation through March 2015, 5.2 percent higher than through the same period last year.

 

 

2012 Q1

2013 Q1

2014 Q1

2015 Q1

Police Salaries

3,532,386

3,190,717

3,177,952

3,297,960

Police Overtime

392,282

479,269

388,918

459,986

Police Longevity

77,112

69,895

68,638

65,341

Total Police Cash Compensation

4,001,781

3,739,881

3,635,508

3,823,287

% Change

N/A

-6.5%

-2.8%

5.2%

 

As discussed in our September 2013 Police Overtime Analysis, overtime expenditures are only part of the story. Some overtime expenditures are reimbursed by private parties, other governmental entities, or grants. Accounting for the reimbursements tracked in the Police Service revenue line, the City had $423,000 in unreimbursed police overtime expenditures through March, which was $79,000 (or 23.0 percent) more than through the same period in 2014.

 

Police Department Overtime including Reimbursements6

 

 

Budget

Q1 Actual

FY14 Overtime

1,814,500

388,918

FY14 Reimbursement

275,000

44,877

FY14 Unreimbursed

1,539,500

344,041

 

 

 

FY15 Overtime

1,693,781

459,986

FY15 Reimbursement

225,000

36,864

FY15 Unreimbursed

1,468,781

423,122

 

The Fire Department spent $79,000 (or 38.4 percent) less on overtime than through the same period in 2014. The City spent $1.0 million on fire overtime in 2014.

 

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).

 

 

 

 

 

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


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 employee contributions. The City uses Commonwealth pension aid and General Fund revenues to make the MMO payments.  The City's total contributions for 2015 are

$13.2 million, 3.2 million (or 32.4 percent) higher than in 2014. 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.

 

 

2015 Q1

2015

Budget

% Spent

2014 Q1

Difference           Difference ($)                     (%)

Police

-

8,398,280

0.0%

-

0

0.0%

Fire

-

2,956,620

0.0%

-

0

0.0%

Employees & Officers

-

1,849,636

0.0%

-

0

0.0%

Total

-

13,204,536

0.0%

-

0

0.0%

 

Employee insurance (Fringe Benefits)

 

The  City  spent  23.3  percent  of  its  fringe  benefit  budget  through  March  2015,  which  was

$513,000 (or 22.6 percent) more than through March 2014.

 

Fringe Benefit Expenditures by Department

 

Fringe Benefits

2015 Q1

2015

Budget

% Spent

2014 Q1

Difference         Difference ($)                  (%)

Admin. Services

187,535

787,955

23.8%

138,284

49,251

35.6%

Public Works

262,468

837,538

31.3%

162,370

100,098

61.6%

Police

1,331,486

5,951,575

22.4%

1,195,323

136,162

11.4%

Fire

704,290

3,135,055

22.5%

579,604

124,686

21.5%

Community Dvlpmt

193,079

838,250

23.0%

130,033

63,045

48.5%

Other

107,008

385,595

27.8%

66,837

40,171

60.1%

Total

2,785,865

11,935,968

23.3%

2,272,451

513,414

22.6%

 

Fringe benefit spending exceeded first quarter levels for all departments relative to 2014. Because the City is self-insured, fringe benefit spending can vary throughout the year as claims are filed and processed.


Other personnel

 

The City spent another $445,000 on other personnel-related expenditures through March.

 

 

2015 Q1

2015

Budget

% Spent

2014 Q1

Difference                 Difference ($)                    (%)

Premium Pay

111,951

311,938

35.9%

118,368

(6,417)

-5.4%

Social Security

242,962

1,063,992

22.8%

246,850

(3,888)

-1.6%

Unemployment Comp

-

100,000

0.0%

-

0

N/A

Penny Fund

5,576

1,935

288.2%

1,022

4,554

445.4%

Uniforms/Clothing Allowance

84,650

165,276

51.2%

84,715

(65)

-0.1%

Total

445,140

1,643,141

27.1%

450,955

(5,816)

-1.3%

 

Debt service

 

The City did not spend any of its debt service budget through March 2015. 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).

 

 

2015 Q1

2015

Budget

%

Spent

2014 Q1

Difference        Difference ($)                 (%)

Debt Service

0

13,145,964

0.0%

578,740

(578,740)

-100.0%

 

Operating Costs

 

Representing 15.0 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

 

 

2015 Q1

2015

Budget

% Spent

2014 Q1

Difference         Difference ($)                  (%)

Contracted Services

518,935

4,422,684

11.7%

382,082

136,853

35.8%

Maintenance Agreements

208,241

794,540

26.2%

329,729

(121,488)

-36.8%

Light & Power

267,143

1,448,800

18.4%

183,994

83,148

45.2%

Gas

31,101

602,000

5.2%

115,459

(84,358)

-73.1%

General Plant Supplies

78,123

377,911

20.7%

94,640

(16,517)

-17.5%

Maintenance/Repair Equipment

251,929

1,529,386

16.5%

114,940

136,989

119.2%

Fees

77,838

519,904

15.0%

57,481

20,358

35.4%

Other Operating Cost

664,193

3,932,234

16.9%

601,646

62,547

10.4%

Total

2,097,503

13,627,459

15.4%

1,879,970

217,533

11.6%

 

The City spent $137,000 (or 35.8 percent) more on contracted services through March compared to last year due to increased spending in the Department of Public Works.  The City increased its


Public Works contracted services budget by $1.4 million (or 102.5 percent) in 2015, totaling $2.7 million. Through March 2015, the City spent $216,000 (8.0 percent) of the $2.7 million budget, which is more than twice the amount the City spent through March 2014 ($107,000). The increase is driven by spending on dams and bridge maintenance that was anticipated and incorporated in the budget.7

 

The increase in other operating costs is driven by increased spending on street lights  and property maintenance in Public Works.

 

Other expenses

 

The table below shows other expenses in the General Fund.

 

 

2015 Q1

       2015                 

%          

2014 Q1

  Difference    

Difference  

Budget

Spent

($)

(%)

Contingencies

0

2,342,550

0.00%

0

0

N/A

Miscellaneous

221,117

1,117,340

19.8%

196,797

24,320

12.4%

Self-Insurance Fund

603,875

1,715,498

35.2%

635,424

(31,549)

-5.0%

 

The City budgets a contingency as a buffer against unanticipated revenue shortfalls or increased expenditures that could occur during the year.  In 2015 the City funds this contingency by using

$2.5 million of its prior year fund balance, recorded on the revenue side as a “transfer from fund balance.” Ideally the City will not need to use much of the contingency and also will not deplete its prior year fund balance.

 

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 City reduced the transfer by $800,000 from $2.5 million in 2014 to $1.7 million in 2015 because of the reserve accumulated in that fund.

 

 

 

 

 

 

 

 

 

 

 

 

 

7 The City budgeted $1.2 million in 2015 for the maintenance and repairing of the dams. The City also budgeted

$25,000 for the Court Street Bridge maintenance, $60,000 for a signage study and $10,000 for emergency road signage.