LTC 104-2009 Analysis of Budget to Actuala Revenues & Expenses for the Three Months Ended 12/31/08m MIAMIBEACH
2Q09 APR 17 PIS 2~ 42
OFFICE OF THE CITY MANAGER
No. LTC # 104-2009 LETTER TO COMMISSION
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manager ,
DATE: April 17, 2009
SUBJECT: ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE
THREE MONTHS ENDED DECEMBER 31, 2008, 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 first quarter with
projections through September 30, 2009. Based on the review, it is projected that, overall,
there will be an operating budget surplus of $4,330,233 (1.8%) in the General Fund.
I. General Fund Overview
An analysis of the actual three month operating revenues and expenditures for the period
October 1, 2008 through December 31, 2008, reveals an operating surplus of $60,186,146.
While the surplus as of December 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, approximately 60% of its ad valorem taxes in the first quarter. Ad
valorem tax revenues representing approximately 54% of total revenues have been almost
63% received whereas the remaining 46% of revenues are approximately at the 27% level
as of December 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 December 31, 2008, 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 Segt. 30, 2009 Over/(Under)
Revenues $235,366,925 $235,722,158 $ 355,233
Expenditures 235,366,925 231,391,925 (3,975,000)
Surplus/(Deficit) $ 0 $ 4,330,233 $ 4,330,233
It is important to note that a significant component of the projected year-end revenues is,
once again, 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. It is anticipated that these additional revenues will be at
least 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 are scheduled to be
LTC ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED
DECEMBER 31, 2008, WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30, 2009 FOR
THE GENERAL FUND
Page 2
presented to the Finance and Citywide Projects Committee at the May, 2009 meeting, and
will, therefore, be reflected in the second quarter analysis of budget to actual revenues and
expenses.
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
that 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 $300,000 are shown below.
General Fund Operating Revenues
As of December 31, 2008, revenues collected were 46% of budget or $108,898,268.
Historically, the City receives approximately 60% of its ad valorem taxes in the first quarter,
which must be considered when analyzing actual revenues and formulating year-end
revenue projections. Year-end projections through September 30, 2009 which total
$235,722,268 indicate that revenues will be above budget by $355,233 or approximately
0.2%.
Other Taxes -This category includes franchise and utility taxes on services.
Projections indicate that year-end collections will exceed budget by 2% or $553,252.
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 23% or $3,412,608. 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 18.8% or $2,059,715. This is 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 $1,651,565 in reduced golf course
revenues).
LTC ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED
DECEMBER 31, 2008, 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 4.9% below
budget or $379,301. 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 December 31, 2008, actual expenditures were 21 % of budget or $48,712,122. On a
straight-line average for three months ended December 31, 2008, expenditures should have
been at a minimum, approximately 25% of budget or $58,841,731. Year-end projections
through September 30, 2009 indicate that expenditures of $231,391,925 will be 1.7% under
budget.
Significant variances to budget in excess of $300,000 by General Fund department are
explained below:
1. Parks & Recreation
Budget Projected Budget/Projected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$31,045,463 $29,522,463 ($ 1,523,000)
The Parks & Recreation Department is expected to spend 95% of its budget and
generate ayear-end surplus of $1,523,000 due mainly 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 $1,023,000), as well as savings
from the delayed opening of South Pointe Park and the contracting out of the
maintenance of the park.
2. Police
Budget Projected Budget/Projected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$80,798,978 $80,313,978 ($ 485,000)
The Police Department is expected to spend approximately 99% of its budget and generate
ayear-end surplus of $485,000 due primarily to lower than anticipated internal service costs
in Fleet Management as a result of lower fuel costs.
3. Fire
Budget Projected Budget/Projected
FY 2008/09 Sept. 30, 2009 Over/(Under)
$49,790,544 $49,230,544 ($ 560,000)
The Fire Department is expected to spend approximately 99% of its budget and
generate ayear-end surplus in the amount of $560,000. This is primarily due to salary
savings from vacant positions and lower than anticipated personnel costs.
LTC ANALYSIS OF BUDGET TO ACTUAL REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED
DECEMBER 31, 2008, WITH OPERATING BUDGET PROJECTIONS THROUGH SEPTEMBER 30, 2009 FOR
THE GENERAL FUND
Page 4
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 three 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 Dec. 31, 2008 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
ENUES
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 $ 76,326,489 $ 113,704,841
10,014,389 2,503,597 10,014,389
2,218,974 554,744 2,218,974
98,981 24,745 98,981
24,001,750 4,473,774 24,555,002
14,807,042 9,145,906 18,219,650
10,001,420 1,710,976 9,320,937
10,937,981 1,790,738 8,878,266
2,075,000 772,046 1,946,087
6,310,000 1,263,711 6,060,000
4,483,002 1,473,667 4,370,787
7,685,555 2,149,387 7,306,254
21,865,440 4,916,360 21,865,440
7,162,550 1,792,128 7,162,550
0 0 0
$ 235,366,925 $ 108,898,268 $ 235,722,158
$ 1,461,678 $ 322,790 $ 1,411,678
2,351,552 546,334 2,177,552
1,084,579 195,437 984,579
1,561,692 329,439 1,561,692
4,216,476 953,837 4,182,476
1,991,966 413,783 1,819,966
1,868,568 381,319 1,741,568
919,616 199,214 906,616
4,283,893 953,324 4,253,893
901,374 219,584 901,374
8,990,621 1,895,457 8,865,621
3,127,421 646,967 2,919,421
2,968,414 539,745 2,913,414
4,237,038 975,816 4,237,038
441,561 122,097 441,561
718,268 127,343 718,268
31,045,463 6,338,989 29,522,463
6,513,259 1,355,742 6,513,259
3, 578, 721 685,781 3,309,721
49,790,544 11,287,761 49,230,544
80,798,978 18,699,203 80,313,978
11,463,991 1,476,662 11,413,991
152,278 0 152,278
8,680,000 45,498 8,680,000
2,218,974 0 2,218,974
$ 235,366,925 $ 48,712,122 $ 231,391,925
$ 0
0
0
0
553,252
3,412,608
(680,483)
(2,059,715)
(128,913)
(250,000)
(112,215)
(379,301)
0
0
0
$ 355,233
(50,000)
(174,000)
(100,000)
0
(34,000)
(172,000)
(127,000)
(13,000)
(30,000)
0
(125,000)
(208,000)
(55,000)
0
0
0
(1,523,000)
0
(269,000)
(560,000)
(485,000)
EXCESS OF REVENUES OVER/
(UNDER) EXPENDITURES $ 0 $ 60,186,146 $ 4,330,233 $ 4,330,233