LTC 150-2009 Analysis of Budget to Actual Revenues & Oper Expenses for 6-mos ended 3/31/09 w/ oper budget projections thru 9/30/09 for the General Fundm MIAMIBEACH
OFFICE OF THE CITY MANAGER
NO. LTC # 150-2009 LETTER TO COMMISSION
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager
DATE: June 5, 2009
SUBJECT: ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE
SIX MONTHS ENDED MARCH 31, 2009, WITH OPERATING BUDGET
PROJECTIONS THROUGH SEPTEMBER 30, 2009 FOR THE GENERAL FUND
The Purpose of this LTC is to provide the Mayor and Commission with the status of the FY
2008/09 budget to actual revenue and expenses at the end of the second quarter with
projections through September 30, 2009. Based on the review, it is projected that, overall,
there will be an operating budget surplus of $5,316,860 (2.3%) in the General Fund.
I. General Fund Overview
An analysis of the actual six month operating revenues and expenditures for the period
October 1, 2008 through March 31, 2009, reveals an operating surplus of $47,965,372.
While the surplus as of March 31St seems unusually large as compared to the final projected
for the year ending on September 30th, it should be noted that the City receives a greater
percentage of its ad valorem taxes in the first two quarters. Ad valorem tax revenues,
representing approximately 54% of total revenues, have been almost 77% received,
whereas the remaining 46% of revenues are approximately at the 52% level as of March
31St
The projected year-end operating revenues and expenditures through September 30, 2009,
is, therefore, a more realistic snapshot of anticipated surplus at this point it time. Further,
while the actual revenues and expenditures presented are as of March 31, 2009, the
projections have incorporated more recent information, as available.
A summary of preliminary projected General Fund Revenues and Expenditures as of
September 30, 2009 is as follows:
Adopted Budget Projected Budget/Actual
General Fund FY 2008/09 Sept. 30, 2009 Over/(Under)
Revenues $235,366,925 $238,193,022 $ 2,826,097
Expenditures 235,366,925 232,876,162 (2,490,763)
Surplus/(Deficit) $ 0 $ 5,316,860 $ 5,316,860
It is important to note that a significant component of the projected year-end revenues
continue to be due to Building permit revenues in excess of budget primarily due to the
ongoing review of the application of building permit fee ordinance and the ongoing
implementation of new processes. As anticipated in the LTC# 104-2009, these additional
revenues are partially offset by additional expenses in the Building Department as a result of
new process improvement initiatives being implemented. These initiatives were presented
to the Transparency and Accountability Committee on April 16, 2009 and to the Finance and
LTC - ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE SIX MONTHS ENDED MARCH
31, 2009, WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30, 2009 FOR THE GENERAL
FUND
Page 2
Citywide Projects Committee at the May 5, 2009 meeting, and are reflected in the Building
Department projected expenses for the second quarter discussed below.
In addition, the projections assume that sales tax revenues remain at recent levels, golf
course summer revenues (which are derived primarily from local patrons) will be close to
budget, and that there will be sufficient resort tax revenues to allow for the full budgeted
transfer to the General Fund. Should any of these be reduced, the surplus would be less
than projected.
For a detail of General Fund Revenues by category and Expenditures by Department, see
attached schedule. Detailed comments on those revenue and expenditure categories with
significant variances over $275,000 are shown below.
General Fund Operating Revenues
As of March 31, 2009, revenues collected were 65% of budget or $153,420,553. Historically,
the City receives approximately 75% of its ad valorem taxes in the first two quarters, which
must be considered when analyzing actual revenues and formulating year-end revenue
projections. Year-end projections from all revenue sources through September 30, 2009
which total $238,193,022 indicate that revenues will be above budget by $2,826,097 or
approximately 1.2%.
Other Taxes -This category includes franchise and utility taxes on services.
Projections indicate that year-end collections will exceed budget by 3% or $706,759.
This is primarily due to an increase in revenues from phone services as a result of a
periodic statewide audit of the phone companies.
2. Licenses and Permits -This category includes licenses and building and special use
permits. Despite the downturn in the building industry, projections indicate that year-end
collections will exceed budget by 34% or $5,013,302. This is primarily due to the on-
going review of the application of building permit fee ordinance, the implementation of
new processes which required upfront and back-end disclosure of the actual cost of
remodeling and square footage of new facilities, and continuing review of existing open
building and trade permits.
3. Intergovernmental -This category includes state-shared revenues such as cigarette,
gas, and sales taxes. Projections indicate that year-end collections will be below budget
by 6.8% or $680,483. This is mainly due to a decrease in collections of taxes on sales
due to the overall downturn in the economy.
4. Charges for Services -This category includes fees for copies, passports, fire rescue,
and recreational services. Projections indicate that year-end collections will be below
budget by 15% or $1,625,947. Although slightly improved from the first quarter
projection, this continues to be mainly due to lower than expected revenues which
reflect the decline in visitor and group business for the Miami Beach Golf Club as well
as market conditions and the three month delay in opening of the newly renovated
Normandy Shores Golf Club (a combined total of $1,538,722 in reduced golf course
revenues).
LTC - ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE SIX MONTHS ENDED MARCH
31, 2009, WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30, 2009 FOR THE GENERAL
FUND
Page 3
5. Miscellaneous -This category includes concessions, planning fees, and other
reimbursements. Projections indicate that year-end revenues will be 4% below budget
or $303,372. This is due primarily to lower than anticipated revenues as a result of
savings in the CIP Department and therefore lower cost allocations to capital
improvement projects.
General Fund Operating Expenditures
As of March 31, 2009, actual expenditures were 45% of budget or $105,455,181. On a
straight-line average for six months ended March 31, 2009, expenditures should have
been approximately 50% of budget or $117,683,463. Year-end projections through
September 30, 2009 indicate that expenditures of $232,876,162 will be 1.1 % under budget.
Significant variances to budget in excess of $275,000 by General Fund department are
explained below:
1. City Attorney's Office
Budget Projected Budget/Projected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$4,283,893 $ 4,583,793 $ 299,900
The City's Attorney's Office is anticipated to spend in excess of its budget by
approximately $300,000 primarily due to outside legal counsel expenses. These
outside legal expenses are primarily due to Federal Court litigation involving the
City's effort to provide public access to the Flamingo Baywalk.
A budget amendment will be required to address these expenditures in excess of
budget.
2. Building Department
Budget Projected Budget/Projected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$8,990,621 $9,583,347 $592,726
As noted in the first quarter projection (LTC# 104-2009), the Building Department is
expected to exceed its budget by approximately $600,000 due to ongoing process
improvement initiatives. These initiatives include:
° Central Records Automation: $ 87,802
° Space Reconfiguration: $454,205
° Additional Training: $101,000
° Internal Controls (CCTV, GPS): $ 36,000
Although revenues in excess of budget are more than sufficient to offset these
additional expenditures as discussed above, a budget amendment will be required to
address these expenditures in excess of budget.
LTC - ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE SIX MONTHS ENDED MARCH
31, 2009, WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30, 2009 FOR THE GENERAL
FUND
Page 4
3. Parks & Recreation (Golf Courses)
Budget Projected BudgetlProjected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$31,045,463 $29,370,898 ($1,674,565)
The Parks & Recreation Department is expected to spend 95% of its budget,
reflecting $1,674,565 below budgeted expenditures primarily due to reduced
expenses at the Miami Beach Golf Club which reflect the decline in visitor and group
business as well as market conditions and the three month delay in opening of the
newly renovated Normandy Shores Golf Club (a combined total of $1,159,171), as
well as savings from the delayed opening of South Pointe Park and the contracting
out of the maintenance of the park.
4. Capital Improvement Program (CIP) Office
Budget Projected Budget/Projected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$3,578,721 $3,239,721 ($ 339,000)
The CIP Office is expected to spend approximately 90% of its budget and generate a year-
end surplus in the amount of $339,000. This is primarily due to salary savings from vacant
positions and lower than anticipated personnel costs.
5. Fire
Budget Projected Budget/Projected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$49,790,544 $49,200,965 ($ 589,579)
The Fire Department is expected to spend approximately 99% of its budget and
generate ayear-end surplus in the amount of $589,579. This is primarily due to salary
savings from vacant positions.
CONCLUSION
This analysis of budget to actual operating revenues and expenses for the General Fund
with projections through September 30, 2009, provides the status of the FY 2008/09 General
Fund Budget as of the first six months of the Fiscal Year. The Administration will continue to
monitor revenues and expenses to ensure that we close the fiscal year in a positive position
with overall revenues exceeding overall expenses.
JMG/KGB/JC
ATTACHMENT
FY 2008/09 General Fund Operating Summary Projection
Adopted As of Projected Proj-Adptd
FY 2008/09 Mar. 31, 2009 FY 2008/09 Over/ Under
REVENUES
Ad Valorem Taxes
Ad Valorem Taxes-S Pte Costs
Ad Valorem Cap.Renewal & Replace.
Ad Valorem Taxes-Norm Shores
Other Taxes
Licenses and Permits
Intergovernmental
Charges for Services
Fines and Forfeits
Interest
Rents and Leases
Miscellaneous
Other -Resort Tax contribution
Other -Non Operating revenues
Fund Balance
TOTAL REVENUES
EXPENDITURES
Mayor and Commission
City Manager
Communications
City Clerk
Finance
Office of Budget & Perf Improve.
Human Resources/Labor Relations
Procurement
City Attorney
Economic Development
Building
Planning
Tourism & Cultural Development
Code Compliance
Community Services
Homeless Services
Parks and Recreation
Public Works
Capital Improvement Program
Fire
Police
Citywide Accounts
Citywide Accounts-Normandy Shore
Citywide Accounts-Transfers
Ca ital Renewal & Re lacement
TOTAL EXPENDITURES
$ 113,704,841 $ 90,349,067 $ 113,704,841
10,014,389 5,007,195 10,014,389
2,218,974 1,109,487 2,218,974
98,981 49,491 98,981
24,001,750 11,375,996 24,708,509
14 , 807, 042 13 , 812, 571 19, 820, 344
10,001,420 4,145,214 9,320,937
10,937,981 4,344,679 9,312,034
2,075,000 1,352,319 2,028,249
6,310,000 2,642,249 6,060,000
4,483,002 2,354,809 4,495,591
7,685,555 2,360,503 7,382,183
21,865,440 10,932,720 21,865,440
7,162,550 3,584,253 7,162,550
0 0 0
$ 235,366,925 $ 153,420,553 $ 238,193,022
$ 1,461,678 $ 672,859 $ 1,356,929
2,351,552 1,116,194 2,201,552
1,084,579 417,712 960,422
1,561,692 690,929 1,561,692
4,216,476 1,987,883 4,182,476
1,991,966 835,957 1,820,283
1,868,568 789,178 1,731,328
919,616 431,767 906,616
4,283,893 2,060,201 4,583,793
901,374 441,818 920,821
8,990,621 4,365,716 9,583,347
3,127,421 131,008 2,965,657
2,968,414 1,370,349 2,929,202
4,237,038 2,009,545 4,429,315
441,561 235,693 440,974
718,268 310,039 738,191
31,045,463 12,977,874 29,370,898
6,513,259 3,113,024 6,513,259
3,578,721 1,459,239 3,239,721
49,790,544 23,929,136 49,200,965
80,798,978 40,586,719 80,773,478
11,463,991 5,376,006 11,413,991
152,278 0 152,278
8,680,000 146,335 8,680,000
2,218,974 0 2,218,974
$ 235,366,925 $ 105,455,181 $ 232,876,162
$ 0
0
0
0
706,759
5,013,302
(680,483)
(1,625,947)
(46,751)
(250,000)
12,589
(303,372)
0
0
0
$ 2,826,097
(150,000)
(124,157)
0
(34,000)
(171,683)
(137,240)
(13,000)
299,900
19,447
592,726
(161,764)
(39,212)
192,277
(587)
19,923
(1,674,565)
0
(339,000)
(589,579)
(25,500)
(50,000)
0
0
0
$ 2,490,763
EXCESS OF REVENUES OVER/
(UNDER) EXPENDITURES $ 0 $ 47,965,372 $ 5,316,860 $ 5,316,860