PFM 3rd Quarter 2013 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


 

 

 

Q3 2013 Financial Results

 

This report summarizes preliminary financial results for the period January 1, 2013 through September 30, 2013 based on trial balance financial data provided by the City on November 8, 2013. The data provided included unbudgeted revenues and expenditures associated with the City refinancing of General Obligation bonds through September 2013 ($3.3 million) and September 2012 ($15.4 million). We excluded the associated revenues and expenditures from all numbers and discussion in this report.

 

Overview

 

The City collected 81.6 percent of its budgeted revenues and spent 69.9 percent of its budgeted expenditures through September 2013. Although the results seem positive with revenues collected exceeding expenditures spent by $8.9 million through September, expenditures are understated as the City had not yet made the majority of its $12.8 million debt service payments. The table below compares revenues and expenditures through September 2013 with the budget target.

 

Budget to Actual Comparison

 

 

2013 Q3

2013 Budget

% Spent/Collected

Revenues

62,747,324

76,932,310

81.6%

Expenditures

53,803,241

76,932,310

69.9%

Difference

8,944,083

0

N/A

 

On the revenue side, the City collected $3.8 million (or 6.5 percent) more through September 2013 than through the same period in 2012, setting aside an accounting quirk that understates the 2012 revenues.1 The City collected more revenue from its real estate tax and its earned income tax than a year ago after increasing both tax rates over 2012 levels. Revenues from business privilege tax, rental housing permits and new construction permits are all trailing last year's pace.

 

On the expenditure side, the City spent $9.7 million (or 21.9 percent) more through September 2013 than through September 2012, setting aside the $5.0 million extra debt service payment that the City made in 2012.2 The higher spending level is because the City already made the $9.9 million annual pension contributions in full for 2013 by September. The City did not make the full pension contribution for 2012 until December.

 

 

 

 

1 As explained in the Q4 FY2012 report, the City budgeted a $2.3 million payment from the Greater Berks Development Fund for 2012, but actually received the payment in December 2011. The City’s financial reports include the $2.3 million payment in its 2011 fiscal year.

2 The City paid $5 million toward its unfunded debt loan ahead of schedule in early 2012.


 

 

Eight Trends to Watch

 

Revenue

 

         The City increased its property tax rate by 9 percent this year.  Will the revenue also increase by 9 percent or will higher taxes lead to a lower collection rate? Through September, current year revenues are up 8.2 percent.

 

         The City also increased the earned income tax on residents and non-residents. EIT revenues are outpacing 2012 levels and outperforming the 2013 budget projection.

 

         The 2013 budget increased revenue projections related to housing inspections and zoning activity over 2012 levels. Some of those revenues have underperformed relative to the year  end projections. The City shows $0 on a $508,000 projection for prior year housing rental permits through September, though the related delinquent collections process is now underway. Revenue for housing inspections was at 45.7 percent of the target through September.

 

         The City has collected 69.1 percent of its budget target for EMS user fees through September. The budget assumes the activation of the fourth ambulance starting in the second half of the year.

 

Expenditures

 

         Salary spending is generally on target with 73.9 percent  of  the  total  budget  spent  through September. The City reports spending $854,000 less on police salaries, wages and holiday pay than a year ago. The 2013 budget anticipated lower spending in these areas, partly due to officer turnover.

 

         Through September, the City already exceeded the budget for fire overtime and it will spend more than budgeted on police overtime.   Through September, police overtime spending is

$75,000 more than last year when the City spent $1.9 million. The City budgeted $1.5 million for this year. The City has spent 27 percent less on fire overtime than a year ago, but because the City budgeted $275,000 (or 30 percent) less on fire overtime in 2013, the overtime spending has already exceeded the budget target.

 

         The City reports spending 71.3 percent of its budget for employee health insurance (fringe benefits). Reported expenditures have lagged behind actual expenditures in prior reports, so we will continue to watch closely the trend on benefits spending levels.

 

         Setting aside a timing quirk related to the City’s contribution to the Recreation Commission, the City has spent the same amount on contracted services through September 2013 as through September 2012.


 

 

 

REVENUES

 

The City had $62.7 million in General Fund revenues through September 2013. The table below compares the City’s revenue performance through September 2013 to this year’s budget and to last year through September.

 

 

2013 Q3

2013

Budget

%

Collected

2012 Q3

Difference ($)

Difference (%)

Property Taxes

18,721,698

20,606,517

90.9%

17,215,010

1,506,688

8.8%

Act 511 Taxes

17,871,533

20,986,686

85.2%

16,079,898

1,791,634

11.1%

Licenses, Permits, Fine

3,884,598

6,512,327

59.6%

4,010,142

(125,545)

-3.1%

Intergovernmental

7,358,819

8,629,963

85.3%

6,678,886

679,933

10.2%

Charges for Services

3,839,213

6,192,233

62.0%

3,712,767

126,446

3.4%

Interest and Rentals

1,097,641

1,113,000

98.6%

343,935

753,706

219.1%

Other Revenues

3,996,323

4,921,584

81.2%

2,878,224

1,118,099

38.8%

Transfers in

5,977,500

7,970,000

75.0%

5,715,000

262,500

4.6%

TOTAL REVENUES

62,747,324

76,932,310

81.6%

56,633,863

6,113,460

10.8%

 

 

Property taxes

 

Property taxes represent about a quarter of all General Fund revenues. The City increased its tax millage by 9 percent in the 2013 budgets. The City has collected 8.2 percent more current year revenue than a year ago through September, a little less than the 9.0 percent rate increase.

 

 

2013 Q3

2013

Budget

%

Collected

2012 Q3

Difference ($)

Difference (%)

Current Year

18,156,370

19,706,517

92.1%

16,774,466

1,381,904

8.2%

Prior Years

679,966

1,000,000

68.0%

580,180

99,787

17.2%

Penalties and Interest

201,495

200,000

100.7%

156,662

44,834

28.6%

Discount for Early Payment3

(316,133)

(300,000)

105.4%

(296,297)

(19,836)

6.7%

Property Tax Subtotal

18,721,698

20,606,517

90.9%

17,215,010

1,506,688

8.8%

 

The City has received 68.0 percent of its budget target for prior year tax revenues through September, $99,800 (or 17.2 percent) more than a year ago. Because the Berks County Tax Claim Bureau currently handles delinquent real estate tax collection and uses a longer collection cycle than the City’s prior tax collector, revenues from delinquent collections is expected to be higher than last year.

 

3 Tax payers receive a discount for paying their property taxes early. The City budgets that discount as a negative number against the revenues.


 

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 85.2 percent of its budgeted Act 511 Taxes through September 2013.

 

 

2013 Q3

2013 Budget

%

Collected

2012 Q3

Difference ($)

Difference (%)

Earned Income Tax

13,770,459

16,271,686

84.6%

12,154,312

1,616,147

13.3%

Business Privilege Tax

1,340,010

1,550,000

86.5%

1,795,501

(455,491)

-25.4%

Real Estate Transfer Tax

1,895,825

1,900,000

99.8%

1,296,047

599,778

46.3%

Local Services Tax

812,425

1,200,000

67.7%

772,024

40,402

5.2%

Per Capita Tax

52,813

65,000

81.3%

62,015

(9,202)

-14.8%

Act 511 Tax Subtotal

17,871,533

20,986,686

85.2%

16,079,898

1,791,634

11.1%

 

The earned income tax is by far the largest of these taxes, making up 77 percent of Act 511 tax revenue through September 2013. 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 have outpaced last year’s level, with the City collecting $1.6 million (or 13.3 percent) more than it did through September last year.

 

The City collected 86.5 percent of its business privilege tax budget target through September 2013. Reported BPT receipts are lower in this third quarter report than in the second quarter report because of adjustments made due to the 2012 year-end audit.4

 

Licenses, Permits & Fees

 

This category includes rental housing permit fees, franchise fees, traffic and court fines and business privilege licenses. The City collected 59.6 percent of budgeted revenues in this category and $126,000 (or 3.1 percent) less than it did last year.

 

One of the largest items in this category is the City’s charges for rental housing permits.5 The City already exceeded the budget target of $744,000 for current year permit revenues through September. However, the City also has a $508,000 budget target for prior year permit revenues and the September data does not show any revenue. The delinquent collection process related to the $508,000 target is now underway with an external vendor actively pursuing the amounts due to the City.

 

 

4 The 2012 year-end audit increased 2012 and decreased 2013 BPT current receipts by $158,593 and BPT prior receipts by $25,154.

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


 

Rental Housing Permit Revenues

 

2013 Q3

2013

Budget

%

Collected

Current Year

777,084

743,576

104.5%

Prior Years

0

508,437

0.0%

Housing/Rental Permit Total

777,084

1,252,013

62.1%

 

Revenue for new construction permits is the other major variance in this category. The City has only  collected  $49,000  through  September  2013  versus  the  $596,000  budget  target  and  is

$119,000 (or 70.7 percent) less than through the same period last year. The $596,000 target assumed fees related to the new hotel project, which have since been removed from the City’s 2013 revenue projection.

 

Other Licenses, Permits and Fees

 

 

2013 Q3

2013

Budget

%

Collected

2012 Q3

Difference ($)

Difference (%)

District court summary offenses

634,226

825,000

76.9%

580,609

53,618

9.2%

Franchise fees

373,306

725,000

51.5%

369,283

4,022

1.1%

New construction permits

49,404

596,000

8.3%

168,525

(119,120)

-70.7%

Traffic fines motor codes

224,396

325,000

69.0%

208,951

15,445

7.4%

Business privilege Licenses

269,932

350,000

77.1%

325,998

(56,066)

-17.2%

Quality of life fines

280,912

390,000

72.0%

303,590

(22,678)

-7.5%

Other

1,275,337

2,049,314

62.2%

1,208,733

66,604

5.5%

Subtotal

3,107,513

5,260,314

59.1%

3,165,689

(58,176)

-1.8%

 

Intergovernmental Revenues

 

The City collected 85.3 percent of total budgeted intergovernmental revenues. The largest item in this category is the Commonwealth pension aid, which the City already received in full and above the budget target. The City received more aid than budgeted because it hired additional firefighters under the federal SAFER grant, each of which counts as two units in the Commonwealth’s aid calculation.  The amount of Commonwealth aid per unit also increased by

8.7 percent over last year.

 

 

2013 Q3

2013 Budget

% Collected

2012 Q3

Difference ($)

Difference (%)

Pension-State Contributions

3,068,643

2,800,000

109.6%

2,689,235

379,409

14.1%

Meter Surcharge

1,133,333

1,700,000

66.7%

1,274,994

(141,661)

-11.1%

RAWA Supplement

1,125,000

1,500,000

75.0%

1,125,000

0

0.0%

RPA Supplement

607,500

810,000

75.0%

540,000

67,500

12.5%


 

 

2013 Q3

2013 Budget

% Collected

2012 Q3

Difference ($)

Difference (%)

Grants and Gifts

419,151

222,963

188.0%

472,595

(53,444)

-11.3%

Reading Public Library

337,270

620,000

54.4%

313,009

24,262

7.8%

Other

667,921

77,000

68.4%

264,054

403,867

152.9%

Intergovernmental Subtotal

7,358,819

8,629,963

85.3%

6,678,886

679,933

10.2%

 

At the end of September meter surcharge was lagging behind with the City collecting $1.1 million through September 2013, $142,000 (or 11.1 percent) less than through the same period last year. The City currently collects the surcharge as a direct subsidy at $7.00 per resident, per month.

 

Grants and Gift revenue exceeded the budget target due to the Staffing for Adequate Fire and Emergency Response (SAFER) program administered by the US Department of Homeland Security. The City received a portion of the $2.7 million SAFER grant in 2013, increasing the grant and gift revenue above the budgeted amount. The grant revenue will reimburse the City for the 21 additional firefighter positions.

 

Charges for Services

 

The City collected 62.0 percent of budgeted revenues from charges for services and $126,000 more than a year ago. The largest item in this category is the City’s charges for EMS service where the City has collected $120,000 (or 6.5 percent) more than a year ago.

 

While housing inspection collections are $249,000 (or 71.0 percent) higher than through the same period in 2012, they are also only 45.7 percent of the budget target. Revenue that the Police Department generates by providing additional coverage to specific entities at a reimbursable rate is reported in the Police Service/Copy Service line.

 

The table below shows other large items in this category. The reason admissions fee receipts is lower in this report than in the second quarter report is because of adjustments made due to the 2012 year-end audit.6

 

Service Charge Revenue

 

 

2013 Q3

2013

Budget

% Collected

2012 Q3

Difference ($)

Difference (%)

EMS User Fees

1,959,091

2,836,638

69.1%

1,839,175

119,916

6.5%

Housing Inspection

599,014

1,311,643

45.7%

350,226

248,788

71.0%

Admissions Fee/Tax

214,459

510,000

42.1%

235,050

(20,591)

-8.8%

Kenhorst Police Contract

313,936

418,581

75.0%

307,780

6,156

2.0%

 

 

6 The 2012 year-end audit increased 2012 and decreased 2013 admission fee receipts by $72,027.


 

 

2013 Q3

2013

Budget

% Collected

2012 Q3

Difference ($)

Difference (%)

Police Service/Copy Service

196,993

170,000

115.9%

204,621

(7,628)

-3.7%

Zoning Housing Appeals

0

100,000

0.0%

N/A

N/A

N/A

Police Reimb.RSD

N/A

N/A

N/A

280,292

(280,292)

-100.0%

Other

555,720

845,371

58.8%

495,622

60,098

12.1%

Charges for Service Subtotal

3,839,213

6,192,233

62.0%

3,712,767

126,446

3.4%

 

Interest and rent

 

The City collected 98.6 percent of the budget target for interest and rent because of an accounting change related to FirstEnergy Stadium. The Reading Fightin’ Phils pay the City approximately $300,000 a year with $22,000 for rent and the rest to cover debt service on a bank loan related to the Stadium. Previously the City only budgeted the $22,000 for the rental payment. Going forward the City will also report the $278,000 payment that covers Stadium related debt. The City’s debt service payments should also be $278,000 higher than budgeted so there is no net impact on the City’s financial performance. Other interest and rent revenues include rental fees for other City properties s and bond interest.

 

Interest and Rent Revenues

 

 

2013 Q3

2013

Budget

%

Collected

2012 Q3

Difference ($)

Difference (%)

Rental - Parking Authority

749,997

1,000,000

75.0%

266,664

483,333

181.3%

Rental on Stadium

300,000

22,000

1363.6%

22,000

278,000

1263.6%

Other

47,644

91,000

52.4%

55,271

(7,627)

-13.8%

Interest & Rental Subtotal

1,097,641

1,113,000

98.6%

343,935

753,706

219.1%

 

Other Revenues

 

The City collected 81.2 percent of the total budget in the other revenues category and $1.1 million (or 38.8 percent) more than through the same period in 2012. The largest item in this category is the City employees’ contributions to the cost of health insurance.7 Total employee contributions are double the amount reported through September 2012 because the police officers are making higher contributions in compliance with the Recovery Plan and similar to other employee groups. The City also received a higher than budgeted indirect cost reimbursement from the Water Fund because the underlying calculation was completed in 2013 after the budget target was set at a lower amount.

 

 

 

 

7 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).


 

 

Other Revenues

 

 

2013 Q3

2013

Budget

%

Collected

2012 Q3

Difference ($)

Difference (%)

Employee Insurance Contribution

1,122,261

1,465,845

76.6%

571,462

550,799

96.4%

Indirect Cost Reimb - Sewer

859,200

1,066,442

80.6%

774,750

84,450

10.9%

CDBG Revenue to Fund Codes

339,415

500,000

67.9%

-

339,415

N/A

Heart & Lung Reimbursement

289,414

300,000

96.5%

130,261

159,152

122.2%

Indirect Cost Reimb - CD

0

282,497

0.0%

142,500

(142,500)

-100.0%

Rdg. Housing Auth - Reimb.

186,889

265,000

70.5%

71,472

115,417

161.5%

Indirect Cost Reimb- Recycling

188,247

254,896

73.9%

100,755

87,492

86.8%

Indirect Cost Reimb- Water

504,673

250,000

201.9%

508,530

(3,857)

-0.8%

Direct Cost Reimb. - Trades

80,477

170,000

47.3%

108,166

(27,689)

-25.6%

Other

425,748

366,904

116.0%

470,328

(44,580)

-9.5%

Other Revenues Subtotal

3,996,323

4,921,584

81.2%

2,878,224

1,118,099

38.8%

 

Interfund revenues

 

The City transfers $4.97 million from the Water Fund to the General Fund as an annual payment from the Reading Area Water Authority (RAWA) to lease the City’s system. The lease agreement between the City and RAWA sets the transfer amount.8 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.

 

 

2013 Q3

2013

Budget

%

Collected

2012 Q3

Difference ($)

Difference (%)

Transfer from Water Fund

3,727,500

4,970,000

75.0%

3,315,000

412,500

12.4%

Transfer from Sewer Fund

2,250,000

3,000,000

75.0%

2,250,000

0

0.0%

Other

0

0

N/A

150,000

(150,000)

-100.0%

Transfers Subtotal

5,977,500

7,970,000

75.0%

5,715,000

262,500

4.6%

 

EXPENDITURES

 

The City had $53.8 million in General Fund expenditures through September 2013, which is 69.9 percent of the $76.9 million budget. The City spent $9.7 million (or 21.9 percent) more than it did through September 2012. The higher spending level compared to the same period in 2012 is

 

 

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


because the City did not make its pension contributions until December last year. The table below compares the City’s expenditure performance through September 2013 to this year’s budget and to last year through September.

 

 

2013 Q3

2013 Budget

%

Spent

2012 Q3

Difference ($)

Difference (%)

Salaries, wages & holiday pay

20,309,525

27,486,737

73.9%

20,818,634

(509,109)

-2.4%

Overtime

2,267,435

2,175,563

104.2%

2,500,538

(233,103)

-9.3%

Pensions

9,947,536

9,919,726

100.3%

0

9,947,536

N/A

Fringe benefits

7,103,388

9,968,428

71.3%

6,844,763

258,626

3.8%

Other personnel

1,165,648

1,639,017

71.1%

1,246,295

(80,647)

-6.5%

Debt service

4,406,053

12,774,079

34.5%

4,631,426

(225,373)

-4.9%

Operating costs

6,016,335

8,770,024

68.6%

6,325,484

(309,150)

-4.9%

Other expenses

608,013

577,137

105.3%

506,499

101,513

20.0%

Contingencies

2,321

985,615

0.2%

7,249

(4,928)

-68.0%

Interfund transfer expenses

1,976,988

2,635,984

75.0%

1,265,770

711,218

56.2%

Total Expenditures

53,803,241

76,932,310

69.9%

44,146,657

9,656,583

21.9%

 

Personnel

 

The majority of the Personnel budget is for the “regular” pay of City employees - salaries, temporary wages, and holiday pay. These categories make up 91 percent of the 2013 Personnel budget. Overtime pay represents another 7.2 percent of budget. The remaining 1.8 percent includes longevity, any settlement payments and uniform/clothing allowance.

 

The table below shows spending for salaries, temporary wages, and holiday pay by department. All departments are close to the 75 percent spending level expected through the third quarter of the year. The Fire Department is a little higher than 75 percent and $348,000 (or 6.1 percent) higher than last year because of increased headcount related to the SAFER grant. Community Development has spent $150,000 (or 11.0 percent) more than last year because of increased headcount in the Property Maintenance Division.

 

Salaries, Temporary Wages and Holiday Pay by Department

 

 

2013 Q3

2013 Budget

% Spent

2012 Q3

Difference

($)

Difference

(%)

Police

9,293,409

12,949,255

71.8%

10,146,925

(853,516)

-8.4%

Fire

6,038,721

7,708,755

78.3%

5,690,320

348,401

6.1%

Public Works

1,082,291

1,455,686

74.3%

1,236,250

(153,959)

-12.5%

Admin. Services

1,191,081

1,630,694

73.0%

1,193,654

(2,573)

-0.2%

Comm. Development

1,513,588

2,082,784

72.7%

1,363,257

150,331

11.0%

Other

1,190,435

1,659,563

71.7%

1,188,228

2,207

0.2%

Total

20,309,525

27,486,737

73.9%

20,818,634

(509,109)

-2.4%


 

Police has spent $853,000 (or 8.4 percent) less than a year ago through September. One possible explanation is that several police officers retired in 2012, impacting salary spending in two ways. As officers retired, they converted unused leave into cash payments, increasing the 2012 spending levels. The City hired new officers to fill their vacancies, and those officers have lower starting salaries, reducing the 2013 spending levels. This needs to be monitored along with the department's overtime spending to see if it is a sustained trend.

 

Overtime

 

The City’s overtime expenditures have exceeded the budget target, although it is $233,000 (or

9.3 percent) less than through September 2012.

 

 

2013 Q3

2013 Budget

% Spent

2012 Q3

Difference

($)

Difference

(%)

Police

1,367,871

1,479,063

92.5%

1,293,264

74,607

5.8%

Fire

859,558

640,000

134.3%

1,182,715

(323,158)

-27.3%

Public Works

34,201

54,500

62.8%

22,119

12,083

54.6%

Other

5,805

2,000

290.3%

2,440

3,365

137.9%

Total

2,267,435

2,175,563

104.2%

2,500,538

(233,103)

-9.3%

 

The Police Department spent $75,000 (or 5.8 percent) more through September in 2013 than last year when overtime spending finished at $1.9 million. As discussed in the Police Overtime Analysis produced by PFM in September 2013, reporting police overtime expenditures alone misses part of the story. A significant part of the Department's overtime expenditures are paid for by private parties, other governmental entities, or grants. Including some of these reimbursements that are tracked in the police service revenue line item, the City had $1.2 million in unreimbursed Police overtime expenditures through September 2013, $82,000 (or 7.5 percent) more than through the same period in 2012.

 

 

Budget

Q3 Actual

Difference ($)

Difference (%)

FY12 Overtime

1,187,500

1,293,264

(105,764)

-8.9%

FY12 Reimbursement

135,000

204,621

69,621

51.6%

FY12 Unreimbursed

1,052,500

1,088,643

(36,143)

-3.4%

 

 

 

 

 

FY13 Overtime

1,479,063

1,367,871

111,192

7.5%

FY13 Reimbursement

170,000

196,993

26,993

15.9%

FY13 Unreimbursed

1,309,063

1,170,879

138,184

10.6%

 

The Fire Department already exceeded its budget for 2013, though it spent $323,000 (or 27.3 percent) less than through September 2012 when overtime spending finished at $1.7 million.


 

Benefits

 

This category includes the City's annual required contributions to the employee pension funds 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 2013 are $9.9 million, which is $3.5 million (or 55 percent) higher than a year ago. As noted earlier, the City made its full MMO payment by September this year, unlike last year when it made the contribution in December. Making a portion of the pension payment early in the year is a good practice since it allows the City to benefit from any investment gains during the early months of the year.

 

 

2013 Q3

2013 Budget

% Spent

2012 Q3

Police

6,057,188

6,057,187

100.0%

0

Fire

2,286,857

2,286,857

100.0%

0

Employees & Officers

1,603,491

1,575,682

101.8%

0

Total

9,947,536

9,919,726

100.3%

0

 

Employee insurance (Fringe Benefits)

 

The City spent 71.3 percent of its fringe benefit budget through September 2013, $259,000 (or

3.8 percent) more than through September 2012.  Reported spending for the non-public safety units is particularly low compared to budget.

 

Fringe Benefit Expenditures by Department

 

 

2013 Q3

2013 Budget

% Spent

2012 Q3

Difference ($)

Difference (%)

Police

3,936,554

4,709,012

83.6%

3,557,765

378,789

10.6%

Fire

1,834,829

2,706,153

67.8%

1,785,730

49,099

2.7%

Comm. Development

374,655

764,450

49.0%

370,024

4,631

1.3%

Public Works

351,956

688,005

51.2%

489,977

(138,020)

-28.2%

Admin. Services

335,303

657,427

51.0%

356,818

(21,515)

-6.0%

Other

270,090

443,381

60.9%

284,449

(14,358)

-5.0%

Total

7,103,388

9,968,428

71.3%

6,844,763

258,626

3.8%


 

While the City was on pace to spend less than budgeted for active employee health insurance, the City anticipates it will spend more than budgeted on total fringe benefit costs this year. The 2013 budget assumed the City would reduce the number of retired employees receiving City- funded health insurance. To date, the City has not significantly reduced the number of retired employees on its health insurance roles.

 

Other personnel

 

The City spent another $1.2 million on other personnel-related expenditures through September,

$81,000 (or 6.5 percent) less than through September 2012. Spending on these items is lower than a year ago because of reduced expenditures for premium pay, social security and unemployment compensation.

 

 

 

2013 Q3

2013

Budget

% Spent

2012 Q3

Difference ($)

Difference (%)

 

Premium Pay

324,173

369,659

87.7%

373,240

(49,067)

-13.1%

Social Security

691,402

978,333

70.7%

718,983

(27,580)

-3.8%

Unemployment Comp

17,639

150,000

11.8%

75,711

(58,072)

-76.7%

Penny Fund

3,199

500

639.8%

2,480

719

29.0%

Uniforms/Clothing Allowance

129,235

140,525

92.0%

75,881

53,354

70.3%

Total

1,165,648

1,639,017

71.1%

1,246,295

(80,647)

-6.5%

 

Debt Service

 

The City spent 34.5 percent of its debt service budget through September 2013. 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).  The  second payment usually includes interest and principal amounts, so the City will make the majority of its debt service payments in the fourth quarter.

 

 

 

2013 Q3

2013 Budget

% Spent

2012 Q3

Difference

($)

Difference

(%)

Debt Service

4,406,053

12,774,079

34.5%

4,631,426

(225,373)

-4.9%

 

Operating Costs

 

Representing 11.4 percent of the total budget, this is the category for materials and services that are used in regular government operations. It includes utility costs, legal services, equipment, and building maintenance costs.


Operating Costs

 

 

2013 Q3

2013 Budget

% Spent

2012 Q3

Difference ($)

Difference (%)

 

Contracted Services

1,425,712

1,937,376

73.6%

1,306,374

119,339

9.1%

Maintenance Agreements

662,513

853,635

77.6%

785,330

(122,817)

-15.6%

Light & Power

333,443

612,723

54.4%

402,280

(68,837)

-17.1%

Gas

469,589

575,000

81.7%

507,012

(37,424)

-7.4%

Other Operating Costs

3,125,078

4,791,290

65.2%

3,324,489

(199,411)

-6.0%

Total

6,016,335

8,770,024

68.6%

6,325,484

(309,150)

-4.9%

 

The City spent $119,000 (or 9.1 percent) more on contracted services through September compared to last year. The higher spending level is because the City made the $488,000 payment to the Recreation Commission in full by September 2013 versus paying part of the eventual total through September last year.

 

Setting aside that timing quirk, the City spent roughly the same amount on contracted services through September in 2013 as in 2012. The City has spent $70,000 less than a year ago on contracted services in the Mayor’s office, $60,000 less in fire suppression and $66,000 less in the Managing Directors Office. Countering these variances, the City spent $116,000 more than a year ago in the Police Department and $88,000 more in the Accounting and Fiscal Management Office.

 

Other expenses

 

The table below shows other expenses in the General Fund.

 

 

2013 Q3

2013

Budget

%

Spent

2012 Q3

Difference ($)

Difference (%)

Contingencies

2,321

985,615

0.2%

7,249

(4,928)

-68.0%

Miscellaneous

608,013

577,137

105.3%

506,499

101,513

20.0%

Interfund transfers

1,976,988

2,635,984

75.0%

1,265,770

711,218

56.2%

 

Contingencies represent the City’s fund balance. Rather than budgeting revenues higher than expenditures and showing a fund balance, the City budgets expenditures to equal revenues, with the difference in the Contingencies line. The City theoretically should not spend much in these lines, which has been the case so far in 2013.

 

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. The size of this transfer increased by $948,000 (or 56 percent) in 2013 and the spending to date reflects that increase.


We have grouped all other expenses in a category called miscellaneous. This includes expenditures related to the Charter Review Board, which were $137,000 through September 2013 and $92,000 more than a year ago through September.